I love analogies; they help clarify misleading language. These occurred to me when I heard Robert Reich talk. One thing he mentioned was that the absolute national debt/deficit was not as important as the debt-to-GDP ratio. So government austerity is not necessarily good for the economy.
- (national) debt : (national) deficit :: news : history
- (national) debt : (national) GDP :: mortgage : capital appreciation
"Our Gross National Product counts air pollution and cigarette advertising, and ambulances to
ReplyDeleteclear our highways of carnage. It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl. It counts napalm and counts nuclear warheads and armored cars for the police to fight the riots in our cities. It counts Whitman's rifle and Speck's knife, and the television programs which glorify violence in order to sell toys to our children. Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile,"
~ Robert F. Kennedy, 1968
Thus starts a paper measuring Massachusetts exchange of value as measured by both GDP and GPI (=Genuine Progress Indicator): http://www.uvm.edu/giee/research/MAGPI2012.pdf
The following article sums up the paper's findings:
http://www.uvm.edu/giee/?Page=news&storyID=20103&category=gund
Author Hazel Henderson has noted frequently the limitations of GDP and GNP
in evaluating social progress. Please see her work: http://hazelhenderson.com/2008/04/30/whats-wrong-with-market-economics-and-gdp-april-2008/