By the curious standard of the GDP, the nation's economic hero is a terminal cancer patient who is going through a costly divorce. The happiest event is an earthquake or a hurricane. The most desirable habitat is a multibillion-dollar Superfund site. All these add to the GDP, because they cause money to change hands. It is as if a business kept a balance sheet by merely adding up all "transactions," without distinguishing between income and expenses, or between assets and liabilities.
If you and I sell the same $1 apple to each other ten times, we still have one apple, but we have a GDP of $10. Oh, and we had revenue of $5 each, so we still have one apple, but we both owe the government $2.
Cobb, Halstead, Rowe, The Atlantic, October 1995
If you and I sell the same $1 apple to each other ten times, we still have one apple, but we have a GDP of $10. Oh, and we had revenue of $5 each, so we still have one apple, but we both owe the government $2.