GDP is a horrible measure of economic progress, but it is what we have at the moment, so we have to go with it. It is a measure of every dollar that changes hands, productive or destructive. One of the biggest drivers of GDP growth is natural disasters. Let that sink in and you’ll have an idea of how badly we need to adopt different measures of progress.
Another problem we have is a totally fubar’d concept of money and its source. Most modern economies can be aptly described as playing monopoly while attempting to adhere to the rules of some unrelated board game. Both banks and businesses gain considerable advantage from these misconceptions, so don’t expect a movement to reality any time soon. People who believe that “their” tax money funds their government are easily manipulated into political alliances with those who agree with their philosophy concerning who should benefit from government spending and who pays taxes.
Money is a construct of government, a unit of measure to denominate prices and contracts that can be easily forced on society by simply imposing a tax only payable in the denomination the government creates at will. Once the tax is levied everyone in the economy becomes unemployed until they can earn enough to satisfy the tax obligation, whether they want to or not. This sounds brutish, but it organizes an economy around the government’s currency and allows the issuing government to provision itself on demand without needing a revenue stream.
Once the tax is levied the government then must spend its currency into the economy before actually collecting that tax or there is nothing to collect. Despite all of the rhetoric surrounding taxation and government spending, this required order of processes makes all currencies fiat regardless of any attempts to limit the government with commodity backing or pinning to other currencies/exchange rates. A proper understanding of this order would eliminate any “borrowing” by the government that is really just welfare for banks and the wealthy.
A monetarily sovereign government never “needs” to borrow the currency it creates at will and must first create the currency to make it available to borrow. This runs counter to the experience of most people and is difficult to grasp for “users” of the currency who spend much of their lives in pursuit of the money to sustain their lifestyle. However, should the reality of currency creation (spending) and destruction (taxation) become common knowledge it would become evident that economies aren’t dependent upon continually monetizing resources to sustain growth. Any activity that is beneficial to society can be monetized by simply paying people to perform it.
This, of course, is very threatening to legacy status quo extraction businesses and banks. Once a business becomes large enough it gains power through the economy’s dependence upon it, especially in the energy and finance sectors. Both have, in recent decades, made a considerable investment in perpetuating the false concept of taxation funding government and promoting the envy politics that falsehood creates.
Should voters figure out that a currency-issuing government can afford anything that is for sale priced in the currency it creates at will, including any labor rejected by the private sector, the game will change considerably for extractors/polluters. Any misery existing in such an economy is strictly a political decision, not economic, as it can always pursue the goal of 100% employment and utilize that labor to accomplish social and environmental goals.
Only the potential availability of real resources limits this reality and overreaching that causes inflation is easily controlled via taxation and shifting distributions with government acting as the employer of last resort that sets the standard for wages and benefits.
