GDP – The Worst Economic Statistic – Ever
There is a whole raft of economic commentators who now agree that calculating the health of nations though GDP is not just outdated, it’s completely wrong.
Just for a start GDP numbers are plainly misleading. Take Saudi Arabia’s income per capita of around $20,000 a year. It depends wholly on the price and production of the volume of oil, which not only fluctuates widely, as it has in the last three years, but it’s natural resource will one day run out. At that point, unless the Saudis have figured out a way out a way of replacing $400 billion from a total GDP of $650 billion through something like developing high-tech industries staffed by educated people — it will rapidly run out of money if it doesn’t
Today, politicians often cite numbers that are misleading. Tax revenues, debt levels, education or health expenditure are often expressed as a percentage of GDP and as you see from this video below – it is the very worst statistic to base an economy on is the first place.
There are many economic statistics, some broadly useful, others bizarrely esoteric. Only one manages to be both useless and dangerous. Worse: it’s trumpeted by journalists, so you may even have been taken in yourself. Welcome to the worst economic statistic.
June 14th, 2018
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