Viral Threat
Not Good Enough
Overwhelming Stimulus
But What About Government Deficits?
And Then There Is the Fed…
Dallas and New York

Economists and investors are rightly obsessed with growth. We always want more of it. We worry it won’t come or, worse, might turn into contraction. Economists of all stripes, from Paul Krugman to Lacy Hunt, recognize economic growth cures all manner of ills.

Yet, exactly what is growth? We think we know, but in reality, it is a sticky question. We usually measure it with Gross Domestic Product. But that’s a statistic which, like the inflation numbers I questioned last month, is both hypothetical and subjective. Like inflation, there is a great deal of disagreement and discussion among those who specialize in it. We can’t be sure the GDP numbers mean what they say. We look at them because we need some kind of benchmark and we don’t have a better one. As Dwight Eisenhower said he learned in the Army, “Plans are worthless, but planning is everything.”

Today I want to look at some aspects of GDP we rarely consider, thinking about how they affect our analysis and choices. But first, let’s talk about where GDP is now and where it may go in the near future.