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What if the GDP was Something Else?

We think Americans will side with the fat, bald, yellow man.

We were eager to read Time’s article entitled “Searching for a Better Wealth Measure Than GDP”. Indeed, the economic measurement has been criticized for decades for its palpable limitations in gauging national wealth. And what a better way to call for its modification, or should we say, substitution; but to have a panel of experts acting on behalf of no less than France.

The report states, “… The 24-person panel, called the Commission on the Measurement of Economic Performance and Social Progress, makes some concrete suggestions, like looking at household income and wealth rather than national production to avoid the false boost that debt-fueled consumer spending gives to GDP. Nonmarket activities such as raising children, caring for the elderly and housecleaning should be taken into account, the panel says, as should environmental sustainability. But most important, it suggests looking at “soft” economic indicators that are linked to well-being, such as access to education, population health and leisure time.”

Well, if nonmarket activities (or those that do not generate income) would be measured, wouldn’t it be fair to incorporate these “unrecorded” real estate activities as well?

• Family members who manage estates pro bono
• Construction workers and handymen who are paid off the books
• Economic “bads” such as pollution that arise from both commercial and residential properties that don’t adhere to green standards
• Nonmarket production such as housing construction using recycled materials – that builders can source without spending a dime

By including these factors (and the millions of nannies’ compensation), the government can generate more revenue from its tax collections. That’s the main goal of the CMEPSP – aside, of course, from creating a more reliable wealth measurement.

Think about it. You can’t measure everything so precisely that everyone’s willing to pay the right taxes. How’s that for revising an old economic tool? Should they participate in the counting for long-term progress or take a course of evasion for selfish benefit?

As psychologist Paul Bloom asks, “… So there is a different dilemma: Do you live a good and happy life or do you satisfy your immediate appetites? Is it better to be Happy Socrates or Happy Homer Simpson?”

We think Americans will side with the fat, bald, yellow man.

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