I agree that GDP is a poor measure of anything relevant to economics. I’m not sure about the rest, but I do believe that economists need to back out of politics and force Congress to accept more responsibility for the economy without serving as lap dogs to give any measure of cover for its more than obvious failures.
It is all too easy for economists to become trapped by their own formulas to the extent that they forget that they are dealing with real resources and their movement between sectors, not just the denomination (dollars) that provides a uniform measure of those resources. When an economist tells us we can’t “afford” to purchase/deploy idle resources, including labor, to invest in future productivity because of the numbers of dollars required we need to discount anything else they might add to the conversation.
One can run out of lumber or concrete to build a house with, but can never run out of inches, feet, or yards used to measure those resources. The dollar, or any non-pegged currency with a floating exchange value, is nothing more than a unit of measure that can be applied to all resources, not a “thing” of itself. The only thing that gives an illusion of scarcity to dollars is the monopoly patent on their production held by Congress and its reluctance to follow its Constitutional mandate to create those dollars “for the common welfare”. ANY misery in this economy that can be mitigated with dollars is a political decision, not economics.
Once one gains a proper perspective of the currency it becomes obvious that the holy grail for politicians, the balanced budget, is just another way of saying 100% tax rate that allows no store of value possible in our commerce to satisfy the desire to save of the private sector. With the additional drains of excessive wealth accumulation and current account deficits, it's a wonder our society is still even moderately functional as the economy is currently managed to service mostly meaningless numbers of deficits and debt instead of using deficits to serve the greater economy and to actually “pay for” the resources the government currently tries to steal with its obsession with balance.
