I think it’s not perfect but probably the best we have.

People forgot or simply don’t realize how much worse life was just a couple of decades ago (in terms of nutrition, access to knowledge, clean water, material wealth).

The question is where. Couple decades ago rent in Munich was like 3x lower. While salaries were insignificantly lower with overall lower living cost.

Couple decades ago Germany had electronics industry. Now it’s gone. More industries are following.

Couple decades ago there were rather isolated Yugoslav Wars. Now it’s introduction into WW3 with active war in Ukraine and hybrid attacks everywhere in Europe.

It depends heavily on location. Indian colleague has completely different world view and is proud how India is progressing.

Just because GDP isn't a measure of affordability or security or industrial strategy doesn't mean it's not useful. It means you should also have measures of those (which in fact do exist because economists are not idiots and do fully understand these kinds of problems).

That progress in India comes as an excuse to weaken their democratic institutions. The fallacy is that Modi is to praise - the progress comes mostly because of enormously positive global trends developed in the past decades, the ones that are now being threatened.

> Couple decades ago there were rather isolated Yugoslav Wars.

A bit of nuance, they ended in 1999, however the whole thing is still influencing Europe negatively and is not as isolated as it seems. Not just there are now seven countries instead of one to consider and negotiate with, a couple of them are utterly disfunctional. Further, two biggest chunks are deeply sunk into nationalism. Far too little effort had been made back then to try to reform the place into a functional system.

Progress in India is due to policy in India. The idea that India can handwave it's successes and failures on external forces might have been well justified in 1955, but in this century they get to choose. Best hope for the anti-Modi-policy crowd is maybe it isn't Modi's policies specifically.

In fact, in the vast majority of cases (including North America, South America, Europe, East Asia, India & South-East Asia) progress is entirely about countries choosing how quickly they are comfortable with improvement happening. Africa and the Middle East it is a combination of policy choices and cultural problems. Arguably foreign interference - although even then policy and strategy tends to be the bigger thing over time.

> Progress in India is due to policy in India.

This is an extremely bold claim. Always was, but especially in today's world it is. I am not saying that Modi's policies are bad, what I am trying to say is that he is basically playing the game on the easy mode. He has access to the unprecedentely dynamic and resilient global economy _and_ he has access to cheap Russian resources Europe doesn't want to buy anymore. All Modi needs to do is not do anything really stupid - the economy will perform well unless clubbed to the head.

And that is all fine, and I am genuinely happy for India. My problem is that Modi is using that easily achieved success to erode democratic institutions - and that will become a problem in the long-term, as it always historically has, everywhere.

Russia wasn't the group that stopped selling oil to the Europeans, the Europeans refused to take it and have a military policy of arming people to blow up the means of transporting that oil to Europe. They're very proud of not using Russian oil. Modi could have joined in with that, he had a lot of people asking him too. Doing nothing (if he did nothing, again - I have no idea about the details of Indian policy) is a rather decisive policy given the pressure the Europeans have been putting on people.

The world has been in easy mode for 70 years now. Any government can choose to sit back and let people get wealthy. It is literally so easy that even the communists figured it out.

Whats the point of this progress which is completely destroying nature and giving people all kinds of cancer, India's oligarchy is more destructive than any other country on Earth. Indians used to be the most naturalist people in the world and now look at the state of the country.

Obviously it depends on your point of view. That entire region (India, Pakistan and Afghanistan) still has a lot of work to do.

Renting for me generally sounds like a bad deal. On the same period the stock grew even more (ex: S&P x4.5 from 2000). So, if you want to say that if you lived 30 years ago in Munich AND did not save anything you would have lived better, I will have to answer that it was just delaying the issue of not being able to save - the ones that were able to save (maybe not living in Munich, maybe other ways), might at some point come and buy something in Munich. Accumulating wealth too much into some hands was the issue decades ago and remains an issue today. Just that decades ago people might not have been aware...

The electronics industries of a couple decades ago were producing stuff that are incomparable to what we have today. Taking that into account, I would say today is "better".

> Renting for me generally sounds like a bad deal.

It always is but not everyone has the option of buying. It takes investment and not everyone's parents are wealthy.

Renting is actually a better deal, financially, in Israel compared to purchasing. Rent is cheaper than the mortgage payment, by hundreds and sometimes thousands of dollars a month, in a society where the average price of housing is more than 14x the average annual salary but most people are highly emotionally compelled to purchase housing as a symbol of stability and wealth creation - an emotional decision instead of a financial one.

As always, local circumstances matter.

We calculated when buying the house near Munich that we pay around 140000€ more than renting our flat forever with moderate rent increase. At the moment of signing we needed bigger apartment. Few years later we see, that despite heavy construction in the old house we will save at least 200000€ as buyers. Rents in German cities are out of control. Probably it’s different in regions with solid real estate supply. Here’s nothing.

Indians are generally too patriotic to trust and its like talking to MAGA sometimes.

It's definitely not the best we have though. People have created all kinds of metrics which measured things in better ways more relevant to our human goals. It's an entire genre of publication in economics and some of them are very popular. It's a choice to ignore them.

Also, see what djtango said. It's not that simple.

Similarly it’s a choice to ignore all those KPIs that are confounded.

Being pedantic about how we measure progress might create the impression that it’s not about the progress but instead about being right.

Well, being right is better than being wrong, which is what happens when you claim that GDP as a measure of progress is valid. It simply doesn't measure what matter to the majority of humans, which has been argued endlessly already.

It's the best that has been used by a society that didn't later collapse though.

That's hardly a relevant response considering no society have used any of the ones I am speaking about in the way that you mean. The OECD, UN, IMF and others use many of them as secondary metrics though.

I just find the "what have the romans ever done for us?" argument to be scary. It leads very quickly and easily to struggle sessions and the terror.

I'm all for trying things for sure, but it has to be done in very small scale and over significant time scales.

"THERE were two “Reigns of Terror,” if we would but remember it and consider it; the one wrought murder in hot passion, the other in heartless cold blood; the one lasted mere months, the other had lasted a thousand years; the one inflicted death upon ten thousand persons, the other upon a hundred millions; but our shudders are all for the “horrors” of the minor Terror, the momentary Terror, so to speak; whereas, what is the horror of swift death by the axe, compared with lifelong death from hunger, cold, insult, cruelty, and heart-break? What is swift death by lightning compared with death by slow fire at the stake? A city cemetery could contain the coffins filled by that brief Terror which we have all been so diligently taught to shiver at and mourn over; but all France could hardly contain the coffins filled by that older and real Terror—that unspeakably bitter and awful Terror which none of us has been taught to see in its vastness or pity as it deserves.”

― Mark Twain, A Connecticut Yankee in King Arthur's Court

Sure. And that longer and older terror was the lack of free markets and science. Exactly the thing the kids these days want to remove because "what did the romans ever do for us?".

All of those except for access to knowledge were better in the U.S. 20-30 years ago even though GDP per capita "grew" even in real terms.

If you take access to knowledge to mean post-secondary tuition, it was also much better 30 years ago

20 years ago? probably not significantly different accept at the margins (i.e. we tamed HIV and now have ways to defend against pandemics) but other than that is life much different?

Simpson's paradox does allow for the possibility that nutrition, access to knowledge, clean water and material wealth has improved in the aggregate while it getting worse for subpopulations.

A lot of people in the world are angry and one of the things that fuels this anger is the "gaslighting" that the data shows their lives are better while their lived reality is the opposite.

Don't forget that Millennials are the first generation to be poorer than their parents in a long time...

> Don't forget that Millennials are the first generation to be poorer than their parents in a long time...

This is simply not true. At some point, we do need to rely on data other than "lived experience," which compares one's quality of life at 22 to someone's quality of life at 50.

"Younger Americans (millennials and Gen Zers) owned $1.23 for every $1 of wealth owned by Gen Xers at the same age."

"Younger Americans (millennials and Gen Zers) owned $1.35 for every $1 of wealth owned by baby boomers at the same age."

https://www.stlouisfed.org/open-vault/2025/june/the-state-of...

If they ever want to own a house they won't need just 23% or 35% more wealth, but more like 200% and 1000% respectively. You do need to start at lived experience to know which data to look at.

Exactly - people have it backwards, when data diverges from lived experience you don't tell lived experience to shut up cuz' dataa you go back and check your models and your data collection. And you check and you check and you check. Einstein was famously wary of Quantum Mechanics rather than taking the findings at face value, and I guarantee that economic data is a hell of a lot less rigorous and more complicated than particle physics. Not to mention the data is political...

The thing is that that's not a conflict between data and lived experience, it's just a conflict between different sets of data. If you measure wealth and then you measure wealth relative to housing costs, neither one of those is "lived experience". If you do a survey on people's sentiments about the economy, that's data too. I'm skeptical of the term "lived experience" precisely because people tend to use it in arguments of the form "let's disregard data in favor of my individual preferences". But when you aggregate the "lived experience" of many people, you get data, and that data can be just as valuable as more anodyne economic data.

The problem with countering lived experience with data, is that whatever data you can provide, it's very unlikely to capture the exact sentiment you're addressing. That doesn't mean one shouldn't try, of course. But one should be very open to the possibility that things are happening outside of your specific data.

The most infuriating example, to me, is the overuse of GDP. As if that should tell us everything.

No, it shouldn't tell us everything, but if someone makes a very data-oriented claim ("millenials will be the first generation poorer than their parents") and you return with data that shows the opposite, you can make a claim that the data is poorly gathered, etc.

But pivoting to the "but it's not my lived experience, bro" is weak.

If you made the claim that "millenials have it harder than their parent" then we're talking something where experience can be more useful.

Yes, but I guess I'd say that we should not attempt to capture an exact sentiment in making policy decisions. The bigger the decision, the more people are involved and affected, and the more people, the greater the variation in their sentiments. It simply doesn't make sense to try to somehow please each individual to address something like housing affordability in the US (or California, or Los Angeles, or even Monterey). The only way to do that is to aggregate sentiments into data. In doing so you lose precision about those sentiments, but that's good, because some of that precision is measuring idiosyncratic stuff that shouldn't play a role in solving the problem in question.

It's funny, I say the exact same thing about crime in NYC.

Statistically it's safer than rural Oklahoma... but your lived experience in taking the subway 45 minutes every day will not paint the same safety experience that can't be found in any statistic.

That's silly. People have wrong impressions about a lot of things. Your "lived experience" (you can just say experience, okay?) can be wrong.

Who exactly has the "lived experience" of being a member of two different generations?

Assuming this is an earnest question - the lived experience is that for some people, they are less well off than their parents. This is a big enough phenomenon that it has been measured and AFAIK is well accepted as a fact. So being poorer than your parents isn't about living the experience of both your life and your parents.

Although anecdotally my father moved to the UK with my mother with nothing but the clothes on their backs, and by 27 my dad was able to afford his first property in London start a family, all without a uni degree and hadn't even yet finished his accountancy training. He did that without any family help and in fact was sending money home. This has always helped provide a bit of colour of how things have changed

That's mean wealth, not median wealth. Mean millenial wealth at 34[0] is $345,000 and median millenial wealth at 38[1] is $130,000. Given that inequality has been rising steadily in the US over the past 30 years, the mean and median wealth of Gen Xers and boomers were almost certainly closer to each other than for millenials.

0: your source has mean at 34 in 2025, https://www.stlouisfed.org/open-vault/2025/june/the-state-of... 1: the best I could find was median at 38 in 2022: https://www.stlouisfed.org/on-the-economy/2024/feb/millennia...

Yeah, but how does millennial median wealth compare to boomer median wealth? That's the question.

I'm happy to be proven wrong.

Millennials are 30-45, roughly.

There’s now a large segment (and several generations) of society for whom the system has never worked, even if the growth of retirement accounts masks the loss of wealth and well-being.

Just a couple of decades ago a common working stiff could buy their family a nice home in any US city.

If you are talking about the 1960s or so, there also were 150 million fewer people in the US? That matters for housing costs.

Some places like Austin, which haven't gone down the NIMBY zoning route, are still somewhat affordable.

Clean water was a one-time thing and more driven by state action than GDP growth. Fittingly, right now the AI bubble is making access to clean water worse for some, fracking did so too. Nutrition? GDP growth made food harder to access for many people before it got better - city laborers had worse food access than farmers. Still today people are living in food deserts. Upton Sinclair's "The Jungle" showed what kind of food unfettered GDP growth actually delivers.

And mere decades ago, life was more or less the same, if not arguably better in many ways.

It's utter trash, it was good when we had industry focused economies instead of service focused ones.

Everybody mocked Russia for having the same gdp as Spain. As it turns out your economy is much stronger when it's focused on heavy industries, steel, mining, oil, &c. Than when it is focused on tourism and other services

One produces value, the other generates money, when shits hit the fan you need energy, the drunk brits coming in your strip clubs aren't that useful anymore

Oh yes sorry, I forgot that Russia is super successful in Ukraine and Europe is on the brink of collapse because it ran out of energy!

That's not my point at all

Do you think Spain would fair better than Russia against Ukraine ?

Actually yes. Ukraine is far easier to invade for Russia. Geography is super flat. You can drive in from anywhere. Easy to supply thanks to sovjet rail. Spain is very mountainous and a pain in the ass to invade. How would Russia supply their troops that are completely rail dependent?

I get your point. Spain would fail miserably.

But you’re not taken into account how many men Russia is losing to maintain that level of aggression. It’s compensating its small GDP with humans.

Spain would never do that and thus fail.

Russia is fighting the war exactly how I would expect an economy of that size to fight a war. Slow attrition coming from an inability to overwhelm their enemy decisively and fast.

How exactly is their economy "strong"? By what measure? You cannot really eat tanks, that is what made life in the Soviet Union unsatisfactory as well.

Current price of Ural oil is some 9 dollars above their breakeven costs. As the classic says, not great, not terrible.

Pointing to Russia as a functioning economy is comical.

Industry focused economies are going to continue to come under pressure due to automation. The US for example has a lot of industrial output, but shrinking industrial jobs. And that’s a good thing. Sending people into coal mines should never be a long term plan.

> Pointing to Russia as a functioning economy is comical.

idk man, France's economy minister said he would bring "russia on its knees" economically, 3 years later it's still not anywhere close to being a reality, the minister isn't here anymore tho.

Put half of the sanctions on spain and it would fold in a month

That may be less a matter of him being wrong per se than of politicians loving to make grandiose and inflated pronouncements.

Depends if you look at Spain in isolation.

On its own? Sure. (Although to be fair to Spain, they've invested heavily in solar and high-value agriculture in recent years).

But seen as part of a system with Germany and perhaps the UK (no longer part of the EU, but was better for both when they were), it's a valuable part of quality-of-life in the overall economic bloc.

Where would you rather live? Spain, easy.

Who would win in a war? Russia, easy.

Some will read this as an argument against the Spanish lifestyle. On balance I prefer to read it as an argument against war.

> Who would win in a war? Russia, easy.

Really? Russia has not even done all that well against Ukraine, a much smaller economy.

What sort of war? I agree Spain could not successfully invade Russia, on the other hand Russia could not invade Spain either. No working aircraft carriers so their air force would be operating from very distant bases (even if they were allowed to pass over the countries in between), limits on ability to land large numbers of troops, etc.

> no longer part of the EU, but was better for both when they were

I do not understand why you even mention that as the EU does not have a military, NATO is relevant and the UK is in NATO.

Its a matter of opinion. I think the UK is at least as well off (growth has been similar to comparable economies like France and Germany since Brexit) without even seeing the long term benefits AND the EU is better off as the UK was a major impediment to the political integration the Euro zone needs.

> Really?

Spain army's is 1/10th of Ukraine's and basically haven't been in anything close to a war in decades, so yes, really and easily lmao.

Ukraine alone produces more military drones per month than the entire EU per year btw.

> Spain army's is 1/10th of Ukraine's and basically haven't been in anything close to a war in decades, so yes, really and easily lmao.

They do not have a border with Russia so how could Russia get their army to Spain?

Ukraine has armed forces geared to fight a land war with Russia. How do Ukraine's air force and navy compare to Spain's?

> Ukraine alone produces more military drones per month than the entire EU per year btw.

Because they are in a war. You cannot compare fully geared up war time production to peacetime production. What was Ukraine's drone output prior to the current Russian invasion?

I’m certain that if Russia somehow managed to attack or invade Spain, they would not be standing alone. I can’t imagine the French will be as content to sit around twiddling thumbs when their neighbor is lit up.

Sure but again that's not my point, my point is that people use GDP to compare all kind of things while it is a completely outdated metric that doesn't really tell you anything about anything unless you use it to compare similar economies or compare the development of a country year after year.

Right but the services sector is more than running strip clubs for tourists. Spain just doesn't export any services other than strip clubs apparently. The US doesn't have this problem. The Financial Services market is the largest in the world.

It hasn't been the best for a long time, and economist have long proposed alternatives, but gdp and gdp per capita seem to be the easiest to calculate and convey.

People forgot or simply don't realize how much better life was just 3-4 decades ago (in terms of nutrition, access to knowledge, clean water, material wealth, housing costs, tuition costs, healthcare costs, jobs).

In advanced western countries that is. If you compare Nigeria from 2000 to Nigeria today, sure, maybe...

> People forgot or simply don't realize how much better life was just 3-4 decades ago

Are you just saying this thinking no one will ask you to back it up with data? Care to quantify what "so much better" actually means?

Better job prospects for more people, lower inflation, cheaper healthcare, cheaper housing (actually affordable housing), less obesity, better school programs, more distributed, less controled, and less corporate internet and web, higher fertility rates, less clouds of war and civil tension, more political legitimacy and better political climate, better nutricion (official stats show obesity at an all time high and rising - despite all the health influencer slop), less impacted rural areas and small towns, and many other stats besides. And a more stable global order too.

Most of those apply both here in Europe and the US.

And that's without even getting into more subjective QoL stuff, from cultural production to the widespread depression and the loneliness epidemic.

What? Access to knowledge was better 3-4 decades ago? You're telling me that people had better access to knowledge in 1986 than they do today?

Infant mortality was 10.4 per 1,000 live births in 1986 in the US. It was 5.5 I'm 2023.

Life expectancy was 74. Now it's 78.

The crime rate peaked in the US in 1991.

Life isn't perfect now. Housing needs to be a lot more affordable, for one. University costs in the US are insane, for another.

But to paint this as no progress? Come on.

Yes, look at the massive 'success' of Vail, Colorado.

Yes, the bottom 90% have had their lives improve a little. But nowhere near the same as the top 10%.

Agreed. Long term economic health is always tied to long term social health. We should be, ultimately, trying to look at a broader index than some simplistic view of just money. It is a hard problem though to pin down an index for social health. As soon as we name a measure or index it becomes a target and its value drops. I tried to think of a more 'universal' index, one that could be applied to civilizations in the past and present and the best I could come up with is the healthier a civilization the more people can live together, longer, without killing each other. Not rigorous, but in general when I view history it seems to fit reasonably well.

GDP as a concept, and "growth" and "inflation" figures, remind me of that line from HBO's Chernobyl: "They gave them the propaganda number".

> Too much and for too long, we seemed to have surrendered personal excellence and community values in the mere accumulation of material things. Our Gross National Product, now, is over $800 billion dollars a year, but that Gross National Product - if we judge the United States of America by that - that Gross National Product counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl. It counts napalm and counts nuclear warheads and armored cars for the police to fight the riots in our cities. It counts Whitman's rifle and Speck's knife, and the television programs which glorify violence in order to sell toys to our children. Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile. And it can tell us everything about America except why we are proud that we are Americans.

Robert F. Kennedy, Remarks at the University of Kansas, March 18, 1968

What is a good measure of meaningful growth? Genuinely asking. I imagine all measures have pros and cons.

I said meaningful measure of economic health, not growth. :-) But I'm not sure. The book "Mismeasuring our lives" gives five recommendations for developing improved measures:

1. Look at income and consumption rather than production

2. Consider income and consumption jointly with wealth

3. Emphasize the household perspective (with this they seem to be focusing on more meaningful measurement of in-kind services and inter-sector payments, like government provision of healthcare and education, etc.)

4. Give more prominence to the distribution of income, consumption, and wealth

5. Broaden income measures to non-market activites (their examples here are things like childcare, where a shift from non-market childcare to market childcare over time can create the illusion of an increase in productivity)

Personally #4 is my biggest beef with GDP (and related measures like GDP per capita). Without some kind of adjustment for inequality, GDP can easily make bad things look good. What we need is not overall growth but equitably distributed gains; even a decrease in GDP could result in most people being better off if it occurred because of wealth redistribution.

and in every metric that encompasses logarithmic values (like income or wealth) normalize the use of the median ffs... Averages are gaslighting the "average" Joe.

> even a decrease in GDP could result in most people being better off if it occurred because of wealth redistribution

Which mechanisms exist to redistribute wealth fairly?

What's your subjective definition of fair?

Whoever wants to redistribute wealth would have to decide that.

You're perfectly free to offer a definition of your own subjective term yourself.

- Time to affordability ratios (Hours of work for food, energy, housing etc)

- Intergenerational social mobility trend

Not doing great on either.

You can't estimate a country with a single number. It makes no sense and actually hurts when someone decides to optimise for that number.

The kardashev scale?

https://energyforgrowth.org/article/watch-countries-climb-th...

Most meaningful alternative measures of growth very strongly correlate with GDP. Which is why we just go with GDP. It has issues but GDP has practical utility.

Infant mortality

Sure, but once countries hit a moderate level of development the bulk of preventable infant deaths are handled. E.g. Frances' rate has been flat since the turn of the millennium.

Seems like you’d asymptotically approach 0% and then this metric would ignore eg space travel or food production efficiency

Do not mistake indicators by using them for things they do not measure.

There’s a lot of work being done by the term “all other things being equal” when using a measure like GDP.

I don’t think we are in times when all else is equal.

I try to see it positive. With the AI bubble, I finally habe a tangible example to point to when I say that GDP growth is a bad indicator for economic success

You could have used the example of Ireland before. They score extremely well on GDP, and yet the quality of life of an average Irish person is on par with the rest of the Western Europe, with the costs of housing pressuring everything else.

Yeah, but everyone knows why. The IMF has called out that 40% of Ireland’s GDP isn’t real because it flows into and back out (back to the US mostly) due to tax schemes.

The book the 'Growth Delusion' has some great examples on this as well. To quote the FTs[1] review of the book.

"The official protocols define the scope of GDP as measuring all monetised activity between willing parties in a given period. It is a pragmatic definition, but leads to some counterintuitive results. The sale of stolen goods for cash contributes positively to GDP, for example — so theft is good for growth. A parent’s housework and childcare, however, being unpaid, are excluded — resulting, by one recent evaluation, in a $3.8 trillion underestimate of the size of the US economy."

I vaguely remember a similar one around traffic jams as well.

[1] https://www.ft.com/content/b6182440-f21e-11e7-bb7d-c3edfe974...

There is also a book called "Mismeasuring our lives" that makes some similar points about the overreliance on GDP as "the" measure of economic health.

The UK is just starting official statistics that include the value of household self supply. I do not know whether there is good enough historical data to compare it with.

Unless you can demonstrate that there is in fact an AI bubble, that is simply begging the question.

Notice how the term “housing bubble” is used much less frequently today than 10 years ago? That’s because that so-called bubble has been ballooning in size for three decades now, and almost nobody still believes that it will “burst” in any meaningful sense. The Dotcom bubble was in many ways an outlier.

There are a few noticeable differences between housing as an asset and AI datacenters. Beyond the obvious difference that a house has a depreciation in the order of decades, whereas AI GPUs are a few years.

Then there is the fact that housing is a fundamental human need whereas AI, as frequently demonstrated, isn‘t even a want by many people.

I am not saying that AI cannot demonstrate todays value 20 years into the future. But there is zero reason to believe the short to medium term payoffs on AI investment will be proportional to the investment we‘ve seen over the past few years

> a house has a depreciation in the order of decades, whereas AI GPUs are a few years.

That’s no longer true for datacenter-class GPUs. The A100 came out six years ago, and it still sells for $15k+, with no meaningful drop in the foreseeable future.

OT: I enjoyed seeing a dictionary-correct use of the term 'begging the question' in the wild :-)

What other uses are there? I only know the phrase as a synonym for “assuming the conclusion”, i.e., a type of circular reasoning.

People often use it instead of 'raises the question'. E.g "There was very little fallout to the Y2K bug, which begs the question: was the Y2K crisis real and well handled or not really a crisis at all?"

E.g https://hn.algolia.com/?q=%22begs+the+question%22

Wow, now that you pointed this out, that interpretation actually makes far more sense than the “correct” one.

The longer it takes to burst, the worse the outcome.

Housing is being propped up by the governments of the west because it was already so problematic if it fails that millions of people would be severely impacted.

Even the housing backed mortgage crisis of 2008 was as large a shock as the great depression, the reason we’re not all using money as toilet paper is due to government intervention. Rightly or wrongly. Some people believe that this intervention makes something worse bound to happen later- and based on the cost of housing I tend to believe them. It is not sustainable to keep housing at its current cost, and the financial model requires that they continue to increase in price. If house prices fall it is a disaster for millions.

It's bursting as we speak, but certain actors are pulling every lever there is to slow down the process:

https://tradingeconomics.com/china/housing-index

Unsuccessfully, I might add.

I think housing as an appreciating is a weird Western capitalist socio-cultural artifact - in order to enter the middle class, you have to buy one, and the way to go about it smartly is to get a bank loan. Most people have no way of affording one otherwise, and if they did, paying sticker price for it would be dumb.

So everyone who's not considered a deadbeat shall be indebted to the bank for decades to come. Their prices are also supported by the collective power of the people - for whatever unreasonable price they're charging for it, you can be certain that someone (or some bank) has paid it, therefore it's in the best interest of significant chucks of regular folks that house prices don't go down.

Imo something similar is going on with retail investing.

Btw housing in China is not an appreciating asset, because you don't own the land, you merely lease it from the government for 70-100 years, which is about the natural lifespan of a lot of buildings, after which maintaining them becomes more expensiv than rebuilding them.

> That’s because that so-called bubble has been ballooning in size for three decades now, and almost nobody still believes that it will “burst” in any meaningful sense.

That's because Boomers live far longer than prior generations thanks to medical advances. The housing bubble will collapse (at least outside of the megalopolises) once the Boomers finally start to die en masse due to their over-representation in demographics.

But before that, the pension systems will crash hard. For people in systems with redistributions (like most of Europe), there simply aren't enough working age people contributing payments for the pensioners, and for people in stonk-based systems (e.g. US 401k), they will run into the issue that someone has to buy the stocks that the pensioners sell off to fund their retirement, and ain't no one of my generation buying stocks, thanks to us having to spend insane amounts of rent.

Well, that rent and the debts incurred to finance consumption is also keeping the profits up and thus stonks valuations

The problem is, people more and more can't manage to pay these rents, so they're either cutting back on any absolutely not necessary spending or going homeless outright. For now, there are enough desperate people that still have some money to pay rent... but retail, no matter which industry, is feeling the impact of people having no spending money hard.

Without the AI bubble artificially propping up the GDP, it is most likely the US economy is in a recession [1].

[1] https://www.cnbc.com/2025/10/14/ai-infrastructure-boom-masks...

It is cause housing bubble was a thing of 2000 and burst in 2008 https://en.wikipedia.org/wiki/2000s_United_States_housing_bu...

People dont talk about housing bubble as much, because it is history at this point. Not something that would go on now.

And no, housing being expensive is not the same thing as a bubble. We dont have bubble in housing now.

> It is cause housing bubble was a thing of 2000 and burst in 2008

<Australia weeps>

It is an indicator and it's not totally non-meaningful. But GDP growth, when it's at the price of increasing the public debt and inflation, is no real growth.

Instead of looking at the US, let's look at what used to be a relevant ally...

In the eurozone, for example, politicians are hiding the lack of growth behind a growing mountain of public debt and the GDP growth ain't even beating inflation since the 2008 crisis. In 2008 the eurozone represented about 25% of the world's GDP. Now it's not even 15% anymore.

Falling into irrelevancy doesn't begin to describe the state of things for the eurozone: from 25% of the world's GDP to less than 15% in 17 years is more than alarming.

And yet if you look at the eurozone in Euro, it looks like it's been growing since 2008. But it's actually been stuck since nearly two decades now and there aren't signs of anything getting any better in the eurozone. German carmarkers, the number one export of the eurozone, are in huge trouble (with China eating their lunch).

The US and China are, obviously, less fucked than the eurozone but the USA's growth has also been achieved at the cost of a runaway public debt and runaway inflation.

I don't know what protectionism can and cannot do for the US and it's not clear if manufacturing can really come back to the US but one thing is certain: the eurozone is a failure and whatever it is that they did or do should definitely not be copied. Unelected bureaucrats have managed, in 17 years, to drive the eurozone into the ground. It's mostly true for non-eurozone EU countries as well but some, like Poland (which is in the EU but not in the eurozone), are doing fine.

Basically: if you want to slash your part of the world's GDP by 40% in 17 years, do what the eurozone did.

Now we must understand this: the eurozone didn't just slash it's part of the global GDP by 40% in 17 years... They did so while, at the same time, creating a gigantic mountain of public debt and experiencing inflation.

Another 17 years of this, so another 40% loss, and the eurozone would only represent 9% of the world's GDP. And these unelected bureaucrats are so incompetent that I don't discard the possibility that they'll actually be able to crash the eurozone even faster than that. For example at the moment, while german carmarkers are in trouble, EU bureaucrats are hard at work trying to kill them for good.

Anti-americanism and anti-trumpism is a thing on HN but people should really look more closely at what's happening elsewhere.

What about an article from The Economist as to the reasons the eurozone managed to lose 40% of their share of the world's GDP since the 2008 financial crisis?

[delayed]

Share of the world's GDP is a flawed metric. It tells us we're getting a smaller slice, but it doesn't tell us if the pie grew or shrunk. If the EU grew by 50% while India and China became 200% richer, then on paper the share of the world's GDP would be dramatically lower, while everyone would be better off.

I don't disagree with the sentiment you expressed at all though.

Ok but did that happen? And that's always been the case, what happens when EU shrinks to <1% of global GDP?

Yeah but it wasn’t the unelected bureaucrats that fucked the EU. It was the German attitude towards debt and the redistribution of surplus. The Eurogroup sheepishly followed whatever Austerity fever dream of Schauble, tanked the Greek economy to teach every other Med country a lesson and by doing so, crippled any chance of post 2009 recovery

The euro group did not follow austerity measures.

Italy's debt has ballooned to 150% of it's GDP, France is heading for 130% in the near future. Whatever happened in the EU, was not Germany's responsibility. Even Greece's debt is way higher than it should be after the Euro zone austerity "cure".

If there had been real austerity and real slashing of the national budgets so that all countries of the euro-zone actually complied with the fiscal pact that says that euro countries should not have a level of debt higher than 60% of it's GDP, then the Euro-zone would actually have some dry powder left to face these uncertain times.

Instead, the only country who seems to try to do something currently is Germany, precisely because it's debt is lower than most Euro-zone countries and therefore it can afford to spend more to try to create growth.

France is running 5%+++ deficit each year and it has not complied with the euro-zone fiscal rules for the last 20 years. Finland has 10% unemployment, Italy is not doing much better.

Where do these countries go from here? Do they cut social services and risk getting ousted in the next election? Do they borrow more and more with not much to show for it? That is the question that is facing these countries and nobody has the answers.

You do realize that the debt/gdp ratio is a ratio?

If you cripple the gdp through austerity policies (killing borrowing to chase the “responsibility dream”) the fiscal multiplier becomes a ruinous curse.

Of course, pissing money into a spending bonfire, driving inflation with excess liquidity, isn’t going to help; bit it’s just as bad as crippling growth by holding it back for lack of capital injection

> You do realize that the debt/gdp ratio is a ratio?

I realize that. I just don't agree that any austerity measures have been taken which was the point of the comment I was responding to.

If real austerity had occurred then the countries' debt to gdp ratio should have been going down for at least a few years in order to get the expenses under control.

Unfortunately, that did not happen as many EU countries including Italy, France and Greece are still not within the EU rules to this very day.

> If you cripple the gdp through austerity policies (killing borrowing to chase the “responsibility dream”) the fiscal multiplier becomes a ruinous curse.

I agree except that these austerity measures as you put it if they ever existed, did not work because the debt to gpd ratio is still increasing in many EU countries.

> Of course, pissing money into a spending bonfire, driving inflation with excess liquidity, isn’t going to help; bit it’s just as bad as crippling growth by holding it back for lack of capital injection

Well Germany doesn't care supposedly. Where that takes us, who knows.

Treating share of global gdp as meaningful is bizarre. It doesn't have to be bad for your share to shrink as long as the overall pie is growing.

When we talk about that in people terms, it goes one way. But then the same people defend the same argument on a country basis?

Aren't they the same thing?

I don't know - GDP has a few counter intuitive cases.

One example is when the same stuff gets more expensive. If I have something, like a loaf of bread, a house, a smartphone all of them the exact same get more expensive, GDP increases if demand doesn't change (let's say because its inflexible).

You could argue this is due to some increased foreign demand for said product and the price increase legit represents increased economic output.

But in the case of tariffs for example, we know that's not the case - stuff became more expensive because of levied taxes. No new stuff got produced, no foreigners are buying up this stuff, demand likely decreased for said product, yet the GDP contribution increased.

Another very typical example are things with inflexible supply, such as housing, where due to the increased volume of money, the exact same house now costs more. But since transactions still happen, that means the economy got better, right?

US looks everything except being "less fucked" as eurozone. It is actively self destructing while mounting debt while, true, trying to destruct everyone else.

We are talking economically if you ignore all the pollical stuff the Eurozone is looks rather questionable at best compared to the USA.

American debt is huge and growing unprecedently bigger. The economy is captured by rather small group of people completely intent on making this forever. It also seems to favor monopolization - one player capturing market and being able to prevent real competition. It has few sectors (ai, gambling, crypto) that do well and kind of hide the fact that other sectors are struggling.

Both countries have high Debt to GDP, US being much higher is also a reserve currency which makes it slightly more complicated.

The point being is that the US should NOT follow ANY economic advice from EU leaders, it is a recipe for disaster.

The Eurozone isn't a failure at all, and as a Polish person it annoys me that we have zloty and not Euro, it's very inconvenient when trying to do business beyond polish borders. It impacts me every month and creates quite some bureaucracy.

In any case where the European union keeps failing is that it keeps not focusing on creating as many common rules and regulations across the EU, so, yet again, scaling your french business beyond your borders, or bulgarian one, is always very difficult.

Most countries in Europe are ridden by pointless nationalism on so many matters when our biggest issue is creating a strong internal market in Europe, but our biggest economies are still manufacturing and exporting ones, with little focus on the strengthening of our internal markets.

Unless you have better alternatives you’re not really saying much.

And I don’t think anyone relies only on GDP. Typically you’d look at employment rates, inflation, etc.

GDP per person should be the measure. The UK managed to make GDP go up while making GDP per person go down.

GDP is not useful to measure how good an economy works. The core problem of GDP is that it does not account for usefulness of spending.

GDP also ignores volunteer work and other non market transactions, completely dismisses externalities for health and the environment, and also has no indication of the distribution of said wealth.

If you had a Rawlsian veil pulled over your eyes and someone said to you "You won't know how rich you will be in that society, but would you rather live in a top ten GDP per Capita country or a bottom ten?" I think we all know what we would reply.

Granted it might not be fine grained enough to distinguish between Number 4 and Number 5 on the list.

Might still be a useless indicator considering that many of the low GDP countries also rank badly in other indicators that are often taken into consideration more broadly, like quality of life indicies, corruption indices or just the Gini coefficient. Correlation does not mean causation

Would you choose to live in one? I'm sure you could move if you believed it was better.

GDP per capita has basically all the same problems.

I'm sure it has problems, but if I look at the top of this list (and exclude the tax havens) the answer to "Would I like to live there?" is Yes.

Likewise for the bottom of the list it's an emphatic No.

Is it a completely accurate indicator? Probably not. Is it directionally accurate? Yes.

https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomi...

Part of the problem though is that people often try to use GDP (or GDP per capita) to compare within the top of the list. Like they try to draw conclusions about whether "Germany is doing better than Italy". It's true that big differences in GDP per capita can distinguish between really good and really bad places, but so can many other measures (like life expectancy or education expectancy). Plus, even on a coarse rubric GDP isn't perfect. I'm pretty sure I'd rather live in Spain than Qatar or Greenland. :-)

GDP and growth are blunt instruments, but they're not meaningless... They tell you something about aggregate capacity, incomes, and whether the system is shrinking or expanding

> meaningful measures of economic health

As someone who lived in a handful of countries with GDP per capita ranging from $3k to $70k I must say that GDP is a great proxy of the QoL and median citizen wealth. Not the only one and not the perfectly correlated one, but a very good one.