GDP?

[lehighguy]

What is a point of GDP worth?
Why is it that big a deal if we have 2.5% or 3.5% growth YoY?


I did a simple little numbers game to get some perspective.

If two economies start with the same GDP per capita, how would big a difference would that one point make.

After 10 years the high growth economy is 10.2% better off.
25 years: 27.5%
50 years: 62.4%
100 years: 164%

Or on a per capita basis. A 2% growth in per capita GDP (price adjusted) from 1900 to today brings us to roughly were we are.

Now let's cut that down to 1%.

The per capita income in the US goes from $36,672 to $13,161. So if we had endorsed policies that lead to even a 1% decrease in GDP growth per year, that's where we'd be at right now.