The GDP Growth, Essay Example

GDP is the quantityduring a specific set time-period that everything in the United States that is produced with some kind of monetary value equals the same number of incomes by the consumer and businesses, then totaling the same total spent by both(Investopedia 1). The simple explanation helps understand the impact of the GDP on the economy. In the last, few years the GDP has not performed very well which is the predictor of the pulse and health of the United States economy. The economist has made some bold predictions that the GDP is on the rise for 2014 and 2015.

The good news from the Washington, D.C. news line, states the United States is on a phenomenal pace for Gross Domestic Product (GDP) growth based on the poor last quarter numbers. The governments and commercial economistremains optimistic this growth will remain steady upward for the rest of 2014.The Gross Domestic Product (GDP) is on the upward growth pattern according to “The Associated Press.” In an article “Growth Revised to 4.6%, Brightening Outlook,”indicates that the economy’s growth for the rest of the year will continue upward growth. This is a great indicator of business investments increasing while the exports have increased on the upward trend as well. A well-informed economist would suggest that the GDP real growth number should be adjusted lower than the 4.6% because of expected changes in consumer spending that may adjust the numbers at a lower rate. In non-technical language, the true GDP would be more accurate especially when the winter keeps consumers from making more purchases. In that case, during the winter season, it would be fair to adjust the GDP downward for the true GDP predictions. “The second quarter in the year has improved from a very low previous quarter. The previous quarters were down by a full percentage point during the lack of consumer purchases. (The Associated Press 1).Conversely, some economist believes the upward trend is so strong that the GDP will remain close to the 4.6% prediction because the consumer spending at the end of the year will keep the predictions accurate. However, some naysayers indicate the performance of the nation is not what it seems because we are now behind the world in manufacturing, business investments, and consumer spending.

The consumers are spending must less because they are making less than to spend. In addition, there are other indicators that the GDP does not consider which non-monetary costs such as pollution are. The GDP also ignores the non-market economy such as community, elderly care, childcare, and household.The market is on a downward direction because the GDP does not count non-monetary factors such the cost of jails, community social work, and mental health counseling. (Cobb 2).

The argument can be made that the GDP does not measure what the people truly value in their lives. The calculations of the economic activity such as number of cards sold leaves out critical information such as non-monetary costs such as daily life balances. In truth, the GDP is just one of the indicators that should be used in determining the health of the economy. The GDP predictions should not be discredited, however, other factors should be used such as the whether consumers have access to basic healthcare and educational opportunities. Its good time to start the new discussion about how the quality of life factor into predicting the true GDP numbers. It is time for the economist to start looking at what the people value in life. GDP gives the pulse of the nation based on what the business have invested and what the consumers have purchased. However, in the future they must ask the question is the consumers happy?

Works Cited

Cobb, C.W. (1994). The genuine progress indicator: Summary of data and methodology. Retrieved from http://dieoff.org/page11.htm

Investopedia. (2014). Definition: GDP. Retrieved from http://www.investopedia.com/terms/g/gdp.asp

The Associated Press. (2014, Sep). Growth revised to 4.6%, brightening the outlook. Retrieved October 26, 2014 from http://www.nytimes.com/2014/09/27/business/economy/-growth-revised-to-46-brightening-the-outlook-.html?_r=0