On paper, the United States economy has never been better; GDP is through the roof, but consumers are suffering, rents are higher, and groceries never seem to come down.  If GDP is booming, why don’t we feel that prosperity? Gross Domestic Product is the sum of consumption, investment, government spending, and the net value of exports and imports in a country. GDP specifically measures economic activity, not the well-being of the economy and those in it. GDP may rise after disasters, illnesses, environmental cleanups, and debt-financed spending. For many years, GDP has been seen as the best measurement of prosperity that modern-day economists have, but should that time come to an end?

In 2023, the United States' GDP was 27.721 trillion dollars, the largest in the world, beating second place by almost 10 trillion dollars. So the US should be the most prosperous and greatest country in the world to live in, right? Maybe for the top 1% that is, since 1979, the top 1% have seen earnings grow by 181%, the bottom 90 have seen earnings grow by just 44%. The wealth in the United States and other developed countries is incredibly concentrated at the top, which is irreparably damaging lower-income earners. So on paper, a country may look prosperous, but in reality, consumers may be struggling. 

Additionally, GDP as a metric does not measure unpaid and care work. GDP may ignore household work like parental and elderly care. These activities add value to the economy but are not represented in GDP. A parent can pay a stranger to care for their child, which would raise GDP, but if they do it themselves, GDP remains the same. 

If GDP is not the optimal economic measure, then what is? Metrics like CPI, HDI, and The Happiness Index are far better measures of not just economic activity but also well-being. These metrics take into account the level of education, average wage, and level of prices in the economy. These measures can inform policymakers in enacting legislation that will improve consumers' lives rather than just corporate efficiency. 

While GDP is an incomplete measure of the entire economy, it is not useless and has a valuable place in policy-making. All in all, policies should be aimed at causing people to thrive, not just economic expansion. We must start measuring what matters if we are going to create a more equal and economically prosperous world.

Works Cited

Macrotrends. “U.S. GDP 1960-2024.” Macrotrends.net, 2024, www.macrotrends.net/global-metrics/countries/usa/united-states/gdp-gross-domestic-product.

Trisi, Danilo, et al. “A Guide to Statistics on Historical Trends in Income Inequality.” Center on Budget and Policy Priorities, 11 Dec. 2024, www.cbpp.org/research/poverty-and-inequality/a-guide-to-statistics-on-historical-trends-in-income-inequality.

United Nations Development Programme. “Human Development Index.” United Nations Development Programme, United Nations, 2024, hdr.undp.org/data-center/human-development-index#/indices/HDI.