GDP: True or False

The gross domestic product is a simple calculation yet complex in understanding. Before knowing the intricacies of GDP, I thought it was a measure of the country's wealth. That its purpose was to appropriate the countries production into a useful number. However, it isn't only that. After watching NPR's video "What is GDP" I found it cool how they found specific indices to total up the country's wealth in a given year.  This method specifies that only goods that are considered to be final goods and services are to be among those that are counted in the GDP. For example, if a steel beam is made, it is not counted as a finished good, until it is bought and used. When that happens the value of a product is appropriated to be apart of the GDP. Items such as the antique Victorian houses under the George Washington bridge till today ae not counted as a product of the GDP when it is bought and sold; rather they add a rent value to the GDP. Economist determine what the buyer would pay in terms of rent and add that to the GDP.

However, this is all an estimate and do not accurately project the country's social structural economy. With the GDP one can determine the per capita rate, but this is a disadvantage because it does not show you detailed and imporatnt informatin such as the number of people living in poverty, the true cost of living, and last but not least the concentration of economic power among the people of that country. Although the GDP is used as an indicator to measure a country's and its peoples wealth, it can be misleading. Dean Baker, co-director of the Center of Economic Policy Research was also inclined to admit the arguability of the GDP measure. He said, "We spend 17 percent of GDP on health care, whereas the average across Europe is less than 10 percent GDP. What do we get for this extra 7 percentage points of GDP? That is not obvious to say the least. The U.S. ranks behind every West European country in life expectancy and does not stand out in most other outcome measures".

We may have a nice figure when it comes to GDP and per capita, but this tells us nothing as to wealth of an average individual. All this tells us is the of the current development and progress or regression of an economy. So how accurate is a GDP when a country can't bail its self and its people out of debt?how important is a GDP when it is at odds with the standard of living? GDP only tells the health of an economy by means of production and its tall tale towards a robust economy.

For more info you can read this: http://www.npr.org/blogs/money/2012/01/10/144914762/why-gdp-per-capita-can-start-a-bar-fight