It is not GDP, it is the service to the population that counts.

It is not GDP, it is the service to the population that counts.

by tonytran2015 (Melbourne, Australia).

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(Blog No. 3xx).

People are often happy when reading the reports of the high growth figures of the GDP of their countries. Actually they are being fooled by government economists. Their quality of life is not measured or even approximated by the GDP or GDP per head figures for their countries.

#GDP, #GNP, #Cost of living, #kick backs, #directors’ income,

1. Why the GDP does not even approximately measure the happiness of the population.

Hologram

1/- The Gross Domestic Product (GDP) of a country only measure the the productive output of the work force of the country (https://en.wikipedia.org/wiki/Gross_domestic_product).

2/- Part of the GDP is then used to pay interest to foreign countries due to their loans for establishing the economic structure of the country. What is left is call Gross National Product, GNP (https://en.wikipedia.org/wiki/Gross_national_income).

3/- Part of the GNP is then appropriated by powerful leaders of the country (in the form of kick backs, corruption, (obligatory) contribution to the foundations set up in honor of the leaders).

(Obligatory) contribution to the foundations is called “Pay to Play” in USA, “Money under the table” in other countries.

4/- {GNP – kick backs} is then distributed between the elites (in the form of huge directors’ incomes (salaries and bonuses)) and the other 95% of the population (in the form of salaries and wages) of the country. {GNP – kick backs – directors’ incomes} is then divided among the 95% of the population

5/- {GNP – kick backs – directors’ incomes}/ head of the average voter is then used to pay monstrously inflated federal, state, local taxes.

6/- {{GNP – kick backs – directors’ incomes}/head – taxes} is then used to pay monstrously inflated prices for necessary services (housing, food, health care, education), that are called the necessary expenses.

7/- {{GNP – kick backs – directors’ incomes}/head – taxes – necessary expenses} is then available for saving for emergency (funds for repairing a breakdown in the home or of the vehicles, going to weddings or funerals) and for discretionary expenses (e.g. new car, new cloth, new fashionable shoes …)

8/- {{GNP – kick backs – directors’ incomes}/head – taxes – necessary expenses – saving for emergency} is then used to pay monstrously inflated prices for necessary services (housing, food, health care, education).

The prices for necessary services (housing, food, health care, education) is called the cost of living (https://en.wikipedia.org/wiki/Cost-of-living_index). So the service an average citizen receive is given by

{{GNP – kick backs – directors’ incomes}/head – taxes – necessary expenses – saving for emergency}/cost of living.

2. A better indicator for the welfare of citizens.

So the service an average citizen receive is given by

{{GNP – kick backs – directors’ incomes}/head – taxes – necessary expenses – saving for emergency}/cost of living

and this figure should be cited rather than the GDP figure when comparing lives in various countries.

The figure can be approximated by

{{GNP – cuts by elites}/head – taxes – necessary expenses – saving for emergency}/cost of living

3. Conclusion.

It appears that government economists purposely ignored the cost of living to make people happy with their lots by citing only GDP but ignoring Cost of Living.

References:

[1]. https://en.wikipedia.org/wiki/Gross_domestic_product

[2]. https://en.wikipedia.org/wiki/Gross_national_income

[3]. Bankers given outrageous incomes by their boards,

[4]. https://en.wikipedia.org/wiki/Cost-of-living_index

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