anthony1617
I agree. I'm not saying government programs are useless. The person you replied to was simply saying that we only have $62,000 a year to spend on each person (and that's all of the resources in the entire economy) and it sounded to me like you were disagreeing and saying we had more than that.
> GDP measures value added to an economy.
I agree.
> If the price of a product drops, it adds less value.
By what definition of value? Are you just defining value as being equal to the price? In a utility-based sense, I think GDP does measure value added to the economy.
> We don't account for all clerical work that has been automated away in the GDP figures anymore because it's essentially free.
In some cases, the GDP might not change if the cost of goods has only gone down, sure, but GDP is a useful figure only relative to the cost of goods. This is how we compare the GDPs of different countries with different currencies.
It's easier to think about these things in terms of labor than in terms of money - money is too abstract and it's easy to make logical errors.
Imagine we have a 100% labor/service economy. Each time money changes hands, it means that that much "value" of labor has been exerted. In this sense, it is clear that the GDP is an accurate representation of precisely how much "value" or labor is being exerted in total across the country each year.
If each time money changes hands, the government takes 27%, that means that 27% of all labor exerted in the economy goes to the government, and is spent, permanently. Money is finite in the same sense that labor is finite in this example.
> But if a competitor offers a generic version of the same drug at ten dollars a year, putting me out of business, that $10k / year diaappears from the GDP figure.
No, then the consumer would put that 10k / year towards some other purpose instead, and it would still show up in the GDP.