What Does the GDP Mean for the Average Worker?
Experts Report: Jonathan Rosenberg, Professor of Political Science
GDP, or gross domestic product, is the measure of the value of all goods and services produced in the national economy over a given period of time. So the good news we just got of a 4.1 quarterly growth, it’s kind of the snapshot from 30,000 feet taken from a fast-moving plane.
What we don’t get from GDP is how the benefits and the costs of that growth are distributed in society. So in terms of effects, there are things we need to look at, for example, it coincides with a period of wage stagnation. So the benefits are not evenly distributed.
We’re also continuing in a long period of growing inequality in terms of wealth and income. So the growth is temporary, and there are positive things about it, but there are also forces that could move things very quickly in the opposite direction.
Some of the growth has been attributed to the tax cuts that were that recently passed by Congress, but those tax cuts also contribute to increased deficits. Government has to borrow to cover those deficits, and it also means that Congress is going to be very reluctant to appropriate more money for dealing with any sort of upcoming economic problems.