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Comment by hmmmmmmmmmmmmmm | Hacker News Reader

High streets are dying, pretty sure half the restaurants closest to me are either closed or going to close down soon. Coming back from Japan it was certainly a whiplash to find just a row of fried chicken shops and empty restaurants.

It made me rethink how great of a signal GDP growth really is on how good things are economically.

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It really bothers me that something like 10% of US GDP is just the amount we over-pay for healthcare compared to peer states. It's basically a privatized tax that buys us nothing (or, to stave off pedantry, certainly nothing remotely worth 10% of our GDP) but we count it as something good.

I worry sometimes about just how much of our GDP is actually fake productivity like that (see also: the significant multiple more that we pay for most infrastructure compared with peer states). It would help explain why a lot of "poorer" countries reportedly don't feel poorer to live in, for a normal family, than the US.

GDP is a useless metric when so much of it basically wash trading.

It's always been a dodgy metric and susceptible to gaming. But now that money is less and less connected to useful value, it's almost a sick joke.

GDP is also useless in that it values doordashing cold fried chicken as more valuable than cooking and eating one you hand raised at home.

GDP records market transactions. So in your scenario, purchasing the chicken, the chicken feed, the chicken coop, etc would all be measured. The time spent raising the chicken (assuming you did not pay someone to do it), would not be captured.

However, I think part of your criticism is a moralistic and health based argument that raising a chicken is intrinsically better and healthier that Doordashing fast food. When a consumer chooses a $60 delivered meal over a $45 home-cooked alternative, that reveals a preference for whatever they value, such as convenience, time saved, taste, service quality, etc. GDP doesn’t evaluate whether that preference is “good”; it only records the transaction value that arises from it.

So I agree GDP is not a perfect measure, but it's far from useless.

GDP is a useful metric when we remember what it problems it was created to solve --e.g. in the Great Depression there was a concern of a decline of economic activity and a way to measure such activity and decide whether it was at a depressed level, and to what degree.

Similarly, the reason in international finance there is a focus on current value GDP is because lenders want to know whether a nation can repay foreign loans. As foreign loans are measured in dollars, lenders care about GDP in dollar terms.

But as is often the case, when people with money or institutional power create a metric for their own use case, many other groups see that and go "Aha! Free data!" and they start writing publications using this data for their own purposes, often forgetting what GDP is actually measuring and forcing it into a proxy for what they care about, for example, development economics, and often this is a poor proxy.

> "It would help explain why a lot of "poorer" countries reportedly don't feel poorer to live in, for a normal family, than the US."

There are many sources for purchasing power parity (PPP) corrected GDP if you're looking for a source on this. PPP-correction does indeed reduce the disparities, but does not eliminate them. It's also tough to judge relative living standards as a tourist or during a short-term stay in a poorer country, as one is generally exposed to 'nice' subset of locales and people.

GDP as a metric is about as bad as "lines of code" as a metric

>It really bothers me that something like 10% of US GDP is just the amount we over-pay for healthcare compared to peer states. It's basically a privatized tax that buys us nothing (or, to stave off pedantry, certainly nothing remotely worth 10% of our GDP) but we count it as something good.

     -every medical licensing racket organization

>I worry sometimes about just how much of our GDP is actually fake productivity like that

Way more than anyone wants to admit.

The arithmetic mean is one of the great tools of statistical lies. You can sweep so much sample variance under the rug with this baby!

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