Read the following two articles and post a response to one of the two questions that follow. You must complete your post by Saturday, April 11.
Greening-the-Gross-Domestic-Product
(1) In “Voices: Greening the Gross Domestic Product,” Garrett C. Groves and Michael E. Webber point out that policy makers are often pressured to choose policies that prioritize either the economy or the environment. Groves and Webber argue that this is a false choice – that policy makers should prioritize both.Ā What are the problems with the way in which Gross Domestic Product is currently measured that make this a challenge?
(2) In “The GDP Myth: Why Growth isn’t always a good thing,” the authors cite several sources of growth that have had negative impacts on economic growth. Identify one of the reasons they site and explain why this source of growth is actually harmful to the economy. __________________________________________________________________________________________________
Optional extra credit assignment (for those who wish): answer the following question in a typed one-page short essay. It should be submitted by April 27.
According to Rowe and Silverstein, the assumption about GDP growth among most economists is that āIt makes no difference where the money goes, and why. As long as the people spend more of it, the economy is said to āgrow.’ā Thinking back to earlier class discussions about the environmental consequences of unplanned, unrestricted growth for its own sake, what are some of the problems with this view of growth and why?
Debt ā Consumer debt comes mostly from consumer spending ā73 percent since ā93ā, a major part of the GDP. Lowering debt will result in lower GDP. This will impact various industries build around debt such as banks (credit card, mortgages and student loans), debt collection agencies and countless small businesses. The USās mentality for growth is to borrow money in order to build and grow. Consumers are thought to buy now and pay later. This starts from young college students, by opening credit cards, to later in life, where an average family has close to ā11 credit cardsā. This endless borrowing provides the banks to explain āgrowthā based on borrowing and paying interest. This mentality has reached all levels of private and public sectors. The 2008 financial crisis was āavertedā on massive government borrowing (deb) and later spending. The idea of āto big to failā leads to massive debt and unprecedented deficits.
Few people realize that debt is not a good way to do business, but in an economic environment where banks punish people that pay their bills on time, thus not contributing the endless interest accumulated on the debt taken, people have very few alternatives.
According to the article “Voices: Greening the Gross Domestic Product” by Garrett C. Groves and Michael E. Webber, both authors raise the environmental concerns and emphasize on measuring the health of the country , not only its wealth.
Moreover, they determined the negative impacts that GDP imposes on the environment such as over-fishing. This would increase GDP, yet, it is a threat to aquaculture. Additionally, they seem to call for change as they mentioned the research methods that were performed in formulating better use of resources.
The problem is that GDP is used to measure the money that the country produces annually but the cost that the environment is paying is truly neglected. The health and sustainability of the environment is what policy makers should be striving for while promoting GDP growth. Yes, it remains a challenge because the problem had been ignored several of years ago lacking an indicator to keep track of their resources and make sustainable use of resources. This aroused many environmental issues today, such as: high sea level, climate change, carbon emissions, air and water pollution, and continues to be a threat in the near future is untreated – all to increase the wealth of a specific country.
According to the article “The GDP myth: Why Growth isn’t always a good thing”, the authors cite several sources of growth that have had negative effects on economic growth. One reason cited was “Growing Nowhere” where the authors discussed the negative effects the growth of traffic has on our economy. According to the authors “Los Angeles has been the most car-congested city in the country for the past 14 years, and burn over $800 million a year in gas.”
This increases the GDP and also the amount of fumes thats in the atmosphere leading to respiratory diseases such as asthma, bronchitis and other breathing problems. The high volume of traffic leads to more car accidents which makes car wrecks a $130 billion industry a year in the US. Yet, auto makers keep making cars that use more gas, cause more damage and are more expensive. In spite of the negatives that arise as a result, consumers keep buying, and manufactures are gonna keep suppling which is going to increase the GDP, despite the negative effects.
Growth in GDP is always presented as health and good by the nationās politicians. Growth is supposed to result or is conveyed as prosperity growth in the lives of the nationās people. It has all changed with America becoming the consumers that drive other economies around the world with increase debt and poor spending habits. Acquiring of more homes, cars and material goods, which doesnāt really add in a positive way to the long term growth, or prosperity of individual or nation. In fact most of this is acquired via debt (auto loans, mortgage, student loan debt and credit cards). The article speaks about the 73% growth in consumer debt since 1993. This burden some debt adds to oneās stress level and adversely affect individual health, which adds to the accumulating health issues faced by this nation. This is all counter to prosperity, with mounting debt, lower paying jobs, or loss of jobs altogether our true quality of life is decreasing. American work multiple jobs at long hours to keep afloat and keep our insatiable consumer life going. Young adults are delaying marriage and having children, or forgoing it all together due to the debt burden they face and being overworked. Raising cost of living (paying more for the same good or service) this is reflected as GDP growth and often seeing, or spoken as a good thing. This also results in many Americans (especially young people) and coupled with loss of jobs, stagnant or decreasing wages being priced out, or taking on even more debt to acquire that first home. So although this is reflected as growth in Americaās GDP itās leading to greater better long term and sustainable growth in other countries in the form of better jobs (manufacturing mainly) which increase their standards of living.
Evan Mirzakandov
Professor MacDonald
Evan Mirzakandov
Professor MacDonald
Evan Mirzakandov
Professor MacDonald
One of the negative impacts on economic growth that the authors cite is based on the growth of traffic āTraffic is a plague; but it’s both a result of growth and also a big source of itā (Rowe). This source is really harmful to the economy because it makes us spend more money on gas. Traffic happens every day of our lives. Waiting on the roads burns a lot of fuel and causes a lot of it to go up into our atmosphere as well.
The GDP equation is missing very important part, which is the expense. Although it is difficult to put a price tag on some natural resources like atmosphere but is doable. one challenge is that some countries will not report their actual green GDP because they still in denial of how much they actually emit (Co2) this denial is coming from the pressure of being able to create jobs to the economy. Another challennge is that, some Lawmakers are not aware of Green GDP because they donāt think that climate change is manmade.
(2) In āThe GDP Myth: Why Growth isnāt always a good thing,ā the authors cite several sources of growth that have had negative impacts on economic growth –
One of the reasons they mention is related to “Flab”, or Girth. They mention things like diets, treadmills, people being too “obese” and fat to fit into airline seats, attributed to things like various junk food advertisements and a shaming culture which perpetuates society into developing eating disorders such as bulimia.
Things like diabetes effects our economy by both creating and exacerbating things like disease, leading to the article quoting “That means more than a sixth of the economy as conventionally measured will be
devoted to treating disease. Not only is that major GDP; it’s also a product of GDP.”
In the article greening the gross domestic product, authors point out that GDP is not the real indicator of the national wealth or growth because it fails to factor in the damages it incur to our environment. They argue that policymakers these days only prioritize the economic factor in measuring GDP leaving the importance of environment.
The problem with this decision is that this indicator gives us the false reading of the country’s growth. While we try to grow and improve the economy, he hugely depend on our environment. The result is increase in countryās carbon dioxide emissions, its pollution, its depletion of ecological assets and/or its deteriorating infrastructure. Thus, in order for us to be able to understand the real GDP, we must not forget to include natural capital and resource depletions and make sure that they are netted out (the way companies depreciate their assets), and pollution costs are negatively valued.
According to the article āVoices: Greening the Gross Domestic Productā by Garrett C. Groves and Michael E. Webber, both the authors highlighted the environmental issues and elevating method how to measure the health of the country . the negative impacts that GDP imposes on the environment such as over-fishing have big concern, it could not only increase GDP, but it is a threat to aquaculture, the amount of fumes that’s in the atmosphere leading to respiratory diseases such as asthma, bronchitis and other breathing problems .
even though they seem to call for change as they mentioned the research methods that were performed in formulating better use of resources. I think policy maker should focus more on building more sustainable infrastructure and decrease traffic pollution in preservation of ecosystem
Francisco Diaz
Professor: Sean MacDonald
In āThe GDP Myth: Why Growth isn’t always a good thing,ā the authors cite several sources of growth that have had negative impacts on economic growth. Identify one of the reasons they site and explain why this source of growth is actually harmful to the economy. There are many reasons why the economy growth isn’t always good. āWorld salvation is serious business, and the United States fulfills this global obligation the way it has fought its wars – with borrowed money. Consumer debt has burgeoned in the United States. It has grown 73 percent since 1993 and is now some $1.5 trillion, which is about the size of the economy of France. (That doesn’t even count home mortgages, which add about $3.8 trillion more.) The average American household has 11 credit cards and owes some $7,000 on them at any given time, plus the car loan and the mortgageā. As cited in the article we are known as consumers. The more that consumer spends, the faster the economies will growth. However; the welfare of the economy growth will definitely have negative impacts. As stated in the article, one of the reasons the growth isn’t always good is because borrowing money from other countries will leave the economy in dept. consumersā debt mostly come from consumer spending growing ā73 percent since ā93ā.this is one of the reasons why the GDP has tremendously growth on the past decades. Lowering the debt could result in lower GDP. I personally believe that by lowering debt the country could be in better shape although; by doing this the GDP would decrease. āThe average of American house hold has 11 credit cards and owes some 7; 000 on them and at any given time, plus car loan and mortgagesā. As stated in this quote, this is mainly why growth isn’t always a good thing. It means more debt and more stress for the future. Besides having negative effects on the economy; it could also leads businesses and landlords to go bankruptcy. For these reasons borrowing and increasing the GDP could be harmful to the economy. Also by putting this country to more debts; could modify the future and the economy for the next generation.
Francisco Contreras
ECON 2505
Sean MacDonald
“The GDP Myth” Debt.
The authors cite several sources of growth that have had negative impacts on economic growth one was debt. We are now consumers our country economy runs on consuming more and more for this we ‘re causing much debt across the country. Consumer debt has grown to 73 percent since 1993 and is now some $1.5 trillion. The author also had some other amazing facts “The average American household has 11 credit cards and owes some $7,000 on them at any given time, plus the car loan and the mortgage.” With debt increasing our consumption will fall. This is a cycle that’s occurring more we spend more debt we get into because we just spend to spend and not thinking for the future. Until we start being more sustainable will never pay off all the debt we owe and the economy wont grow.