Botnst - 10/23/2004 8:08 PM
Yeah, lets get rid of the GDP. Nobody thinks it means anything.
Okay, lets devise a new genaralized index to which we can reliably connect all manner of gov services and international trade relations.
Lets call it, "Summation Having Institutional Totality".
What measure would we throw into it?
GDP measures economic throughput, in other words, the larger it is, the more often dollars are changing hands. You have two different concepts here "economic activity" and "wealth". As an example, lets take Post WWI Weimer Germany, where it took a wheelbarrow full of worthless marks to buy a loaf of bread. The millions of wheelbarrow full of marks changing hands every day give a nice looking GDP number and an impressive measure of economic activity, but the amount of actual wealth these exchanges of money represent is minimal.
Wealth is an easy concept, and as I stated, Mr. B, the valuation of wealth already exists. If the value of the dollar is climbing in relation to other currencies, and the value of the stock market is rising, then your economy is creating actual wealth, not just exchanging ever more worthless dollars in wheelbarrow loads looking for ever more expensive bread. The values of your companies are increasing because they are becoming ever more efficient at what they make, service or sell, and they are also making the right amount of the products people actually want to buy, so the amount of profit they make rises.
Since stock in these companies must be bought in dollars, and the products you produce must be purchased in dollars, and your rising markets make investing in dollar-denominated stocks and bonds more attractive, people in other countries become more willing to trade you greater amounts of their wealth for those slips of paper you carry around in your pocket. The result is a greater accumulation of wealth by everyday people, and a rise in the standard of living.
Our economy used to actually do this. I does no longer. Under four years of the Bush adminstration, the dollar has been in free-fall and the stock market has either been stuck in neutral or it has dropped in value. The main reasons for this is 1) their total reliance on free markets, with zero government intervention and zero government support for investing in immerging technologies that private industry is not willing to invest in, and 2) the willingness of both the government and individuals to maintain the standard of living they have been accustomed to by creating debt instead of wealth.
Altho it resulted in an unfortunate investment bubble, the Internet boom under the Clinton admin is an excellent example of what I am talking about. The Internet was completely researched, developed and initially installed by the US Government. When it was turned over to the free market, a boom was born. We have many other examples, such as the space program. Initiatives of this type require strong leadership. For the past 20 years we have needed a similiar initiative to get off foreign oil, and one to clean up our environment. Free markets, with their boom and bust cylces may give us the former eventually, after depression and national bankruptcy, and will never give us the latter as long it as in means them making a buck. Both are areas where given government support, jobs and new economic sectors can be created that the rest of the world may be willing to buy, restarting the engine that creates wealth instead of the one we have now, the Republican Debt Machine.
We as a country simply have a history of doing better when we have a united national purpose, whether it is fighting Germans or building moon rockets, and we need leadership that is willing to fund and guide these inititives. It is the secret to our national character.