The term GDP is a term that most economists know very well, the three letters GDP stand for Gross Domestic Product. The whole calculation in and out of itself is one giant mess and can cause a great controversy. Economist use GDP to determine how the economy is doing as well as to determine how happy a person might be due to a high GDP. The difficult part about using GDP is that its a national average and does not speak for people individually because the equation becomes skewed and makes it seem like the economy is doing a lot better then it actually is.
GDP calculates the United States total output and it breaks it down to sections, but one section that really stands out is defense spending. The United States spends about 711 billion dollars on the countries defense department while China who is ranked number two is at 143 billion dollars in spending on defense department. The United States spends almost five times more then China does. And the United States makes up forty percent of the worlds total spending on defense. It is just hard to imagine why we need so much money to finance the defense of our country. To me it seems overdone but this is a huge reason as to why our total GDP is so high. If you lowered the spending on our countries defense we wouldn’t have such a high GDP.
People argue that a high GDP will create happiness for the people, but how could this be true if we are spending 7% more on health care then western European countries while their life expectancies are all greater then the United States. We also value our money a lot more then Europeans do as we work more hours then they do while they average 4-6 weeks of vacation. Europeans buy homes the same size as someone making more money over here in the United States because they don’t value their money as high as we do in the US. So you cant say the GDP proves how happy someone is because Europeans are just as happy with less money but equal assets. So ultimately they have less funds. To me Gross Domestic Product can only be valued so much, but at a certain point, it becomes simply opinionated and as the article stated, “GDP per capita can cause a bar fight.”