We know you go home and stroke that GDP, salivating at the prospect of that magic number turning positive so you can deny all that is wrong with the economy...but Joseph Stiglitz just called you out:
Most governments make a fetish out of it. If you take one message out of our report, make it avoid GDP fetishism. The message is to encourage political leaders away from that.
So many things that are important to individuals are not included in GDP. There needs to be an array of numbers but we need to understand the role of each number. We may not be able to aggregate everything together.
The article cites examples, such as increased consumer debt contributing to GDP but not adding to economic output in reality.
We've pointed out the trade contribution is a net difference, and as a result we have phantom GDP that should be attributed to other national economies, due to outsourcing. We also noted that Q2 2009 GDP wasn't as bad as it could be simply because exports declined less than imports. That said a raw decline in exports implies the U.S. wasn't manufacturing and selling much during Q2 2009.
So, most interesting to note that a Nobel Prize winning economist is pointing to macroeconomic metrics that are not capturing the real economic picture for main street.