Totally agree. It all matters. I used GDP growth as the springboard for drilling into the lines from the consumer side to the fixed investment side and where the government fits in. Real GDP helps level the inflation issues somewhat, but PCE (including income and outlays) and CPI review line by line has to be a core activity.
I choose GDP as my favorite "equalizer" to take some of the BS out of it in the case of Trump's big mouth and adjective-heavy hype, but GDP is ground zero for radiating out into the big moving parts. If the consumer is the main driver with no balance in fixed investment, trouble is on the way and there are vulnerabilities.
The income disparity issues matter. I always think back to one of my professors in the 70s harping on "equity" in pareto optimality. I had slightly more colorful language on what that meant from my background in a working class fading industrial city! (Something about what the rich do to the poor.)
All helpful comments. We are breaking new ground in terms of the US being a high political risk environment with debt sustainability question marks. We have a President who has recommended default just last year in a CNN town hall meeting! What happens when he loses a slice of Congress? Brinkmanship on debt as a path to authoritarianism?! This is sure as hell not getting easier!
Wait until Musk and Trump start purging the economic research groups when they don't like the data that is coming out. We heard some of that from Commerce recently. Project 2025 was aiming at those econ data and analysis efforts for "like minded" staffing. "Propaganda 101 meets economics" is something worth worrying about.
Thanks for feedback.
The budget process will be a "cluster of circles."
GDP growth alone doesn’t account for the employment situation in the economy. High GDP growth could still coincide with high unemployment if the growth is not widely distributed across sectors or demographics. Conversely, low GDP growth could mask a significant drop in unemployment, which directly impacts people’s lives. Under Trump’s tenure, for example, unemployment reached historic lows before the pandemic struck, an indicator of the administration’s focus on job creation. Similarly, Biden’s economic policies, although facing challenges, have brought about the lowest unemployment rates in decades. Employment, rather than just GDP, should be a core consideration when evaluating economic success.
2. Inflation and Purchasing Power
GDP growth could be accompanied by high inflation, which diminishes the real purchasing power of consumers. If inflation rises faster than wages, even positive GDP growth might not translate into an improved standard of living for most people. Evaluating inflation alongside GDP gives a fuller picture of how economic growth impacts everyday life. The current inflationary pressures post-pandemic have presented challenges to many families, and these dynamics must be weighed when assessing the success of an economy under any administration.
3. Income Inequality and Wealth Distribution
GDP growth does not account for how wealth is distributed. A high GDP growth rate that disproportionately benefits the top 1% can obscure the fact that the majority of people aren’t seeing tangible improvements in their financial well-being. Economic success should not be evaluated in a vacuum, but in the context of how inclusive that growth is. The challenge of addressing income inequality is paramount to ensuring that economic growth benefits society as a whole, not just a select few. Policies that promote wage growth, access to quality jobs, and wealth redistribution through progressive taxation are just as important as raw GDP numbers.
4. Quality of Life and Social Metrics
Other factors such as healthcare access, education quality, housing affordability, and environmental sustainability matter significantly to a country’s long-term economic success. A nation can experience steady GDP growth while facing deteriorating infrastructure, poor health outcomes, or an unaffordable housing market. Quality of life indicators, including life expectancy, education attainment, and social mobility, provide a much richer picture of whether the economy is truly benefiting its people. Growth that is disconnected from improvements in these areas is ultimately hollow.
5. Sustainability of Growth
Sustainable economic growth, as opposed to short-term growth, is essential for ensuring that future generations inherit an economy that can continue to thrive. Economic policies that prioritize the environment, renewable energy, and long-term infrastructure investments are crucial for ensuring that growth doesn't come at the expense of future prosperity. GDP numbers alone do not speak to whether growth is happening in a way that is sustainable or beneficial for future generations.
6. A Holistic View of Economic Policy
The effectiveness of any administration’s policies must be evaluated with a more comprehensive lens. Trump’s economic policies, including tax cuts and deregulation, boosted certain sectors of the economy, but their long-term impact, particularly in terms of income inequality, environmental sustainability, and public services, requires further scrutiny. Biden’s policies, on the other hand, have focused on rebuilding after the pandemic with a heavy emphasis on infrastructure, healthcare, and climate change—issues that are equally important for the long-term health of the economy.
Totally agree. It all matters. I used GDP growth as the springboard for drilling into the lines from the consumer side to the fixed investment side and where the government fits in. Real GDP helps level the inflation issues somewhat, but PCE (including income and outlays) and CPI review line by line has to be a core activity.
I choose GDP as my favorite "equalizer" to take some of the BS out of it in the case of Trump's big mouth and adjective-heavy hype, but GDP is ground zero for radiating out into the big moving parts. If the consumer is the main driver with no balance in fixed investment, trouble is on the way and there are vulnerabilities.
The income disparity issues matter. I always think back to one of my professors in the 70s harping on "equity" in pareto optimality. I had slightly more colorful language on what that meant from my background in a working class fading industrial city! (Something about what the rich do to the poor.)
All helpful comments. We are breaking new ground in terms of the US being a high political risk environment with debt sustainability question marks. We have a President who has recommended default just last year in a CNN town hall meeting! What happens when he loses a slice of Congress? Brinkmanship on debt as a path to authoritarianism?! This is sure as hell not getting easier!
Wait until Musk and Trump start purging the economic research groups when they don't like the data that is coming out. We heard some of that from Commerce recently. Project 2025 was aiming at those econ data and analysis efforts for "like minded" staffing. "Propaganda 101 meets economics" is something worth worrying about.
Thanks for feedback.
The budget process will be a "cluster of circles."
1. Employment and Unemployment Rates Matter Too
GDP growth alone doesn’t account for the employment situation in the economy. High GDP growth could still coincide with high unemployment if the growth is not widely distributed across sectors or demographics. Conversely, low GDP growth could mask a significant drop in unemployment, which directly impacts people’s lives. Under Trump’s tenure, for example, unemployment reached historic lows before the pandemic struck, an indicator of the administration’s focus on job creation. Similarly, Biden’s economic policies, although facing challenges, have brought about the lowest unemployment rates in decades. Employment, rather than just GDP, should be a core consideration when evaluating economic success.
2. Inflation and Purchasing Power
GDP growth could be accompanied by high inflation, which diminishes the real purchasing power of consumers. If inflation rises faster than wages, even positive GDP growth might not translate into an improved standard of living for most people. Evaluating inflation alongside GDP gives a fuller picture of how economic growth impacts everyday life. The current inflationary pressures post-pandemic have presented challenges to many families, and these dynamics must be weighed when assessing the success of an economy under any administration.
3. Income Inequality and Wealth Distribution
GDP growth does not account for how wealth is distributed. A high GDP growth rate that disproportionately benefits the top 1% can obscure the fact that the majority of people aren’t seeing tangible improvements in their financial well-being. Economic success should not be evaluated in a vacuum, but in the context of how inclusive that growth is. The challenge of addressing income inequality is paramount to ensuring that economic growth benefits society as a whole, not just a select few. Policies that promote wage growth, access to quality jobs, and wealth redistribution through progressive taxation are just as important as raw GDP numbers.
4. Quality of Life and Social Metrics
Other factors such as healthcare access, education quality, housing affordability, and environmental sustainability matter significantly to a country’s long-term economic success. A nation can experience steady GDP growth while facing deteriorating infrastructure, poor health outcomes, or an unaffordable housing market. Quality of life indicators, including life expectancy, education attainment, and social mobility, provide a much richer picture of whether the economy is truly benefiting its people. Growth that is disconnected from improvements in these areas is ultimately hollow.
5. Sustainability of Growth
Sustainable economic growth, as opposed to short-term growth, is essential for ensuring that future generations inherit an economy that can continue to thrive. Economic policies that prioritize the environment, renewable energy, and long-term infrastructure investments are crucial for ensuring that growth doesn't come at the expense of future prosperity. GDP numbers alone do not speak to whether growth is happening in a way that is sustainable or beneficial for future generations.
6. A Holistic View of Economic Policy
The effectiveness of any administration’s policies must be evaluated with a more comprehensive lens. Trump’s economic policies, including tax cuts and deregulation, boosted certain sectors of the economy, but their long-term impact, particularly in terms of income inequality, environmental sustainability, and public services, requires further scrutiny. Biden’s policies, on the other hand, have focused on rebuilding after the pandemic with a heavy emphasis on infrastructure, healthcare, and climate change—issues that are equally important for the long-term health of the economy.