Is GDP the Right Way to Measure Progress?

Recently I’ve read a lot of critiques of GDP as a measure of economic progress.  Mostly the idea pops up in writing about economics and the environment as well as income inequality and other decidedly liberal opinion pieces. 

Economist, Dan O’Neil was recently interviewed in the Globe and Mail about his theory of a “Steady-State-Economy”, the recent British budget and the continuing Eurozone crisis as it extended to the tiny island of Cyprus this past week. 

You can read a portion of the interview here.  But the core of what he says, and how it relates to my theory of Meekonomics is summed up in this quote:

The way things work at the moment is that financial institutions create most of our money through loans. Banks are allowed to create money effectively out of thin air and loan it to me because I promise to pay it back.

As I see it, the system creates three basic problems: It drives inflation because banks tend to create more money than is actually needed for exchange; it drives growth because people then go out and generate economic activity; and it creates periodic crises when the amount of debt gets to be too much. – Dan O’Neil

Banks create money and drive the economy out of thin air through loans!  This is ridiculous and it serves only to enslave people.  Government has bought into this lie hook line and sinker through their low interest rate policies.  It’s gotten so bad that for some it’s downright unpatriotic not to carry a huge amount of debt. 

The amount of debt in the economy right now is stupid!

I’m not sure that Mr. O’Neil’s solution of prohibiting banks from creating money in this way is a viable solution but if enough people simply refused to take on debt as I advocate in the Meekonomist Manifesto the situation will repair itself. 

The point is, consumers need to get out of debt, NOW!

For an advance copy of my book, “Meekonomics:  How to Inherit the Earth and Live Life to the Fullest Under God’s Economy” write to:

1 Comment

  1. Allallt says:

    I actually like a lot of your writing.
    I personally believe that the way we measure the progress of anything should be done by a metric that is tailored to the country in question. That’s not easy, and it certainly makes it very difficult to see how Country A is faring against Country B… but the question of how A and B are going compared to each other is a redundant question.

    There are many countries in the world where GDP is a meaningless statistic. In the poorer countries the rate and stage of progress would be better measured in terms of infrastructure and access to water and food; the ease of mobility of resources; access to a free market.

    In richer countries the wealth of the individuals is also a redundant question compared to a country’s investment in the future and in progress. Investment and use of new, clean energy technologies. But given where a lot of the richer countries are failing, civil liberties and social cohesion is another step in terms of progress.

    GDP measures a very small dimension within money. And that’s a weak indicator of anything.

    Really enjoyed the post.
    (We just disagree on atheism)

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