The Social and Economic Measurement of Nothing

gdp per capita

We’re doing great! Each person in the United States is getting $49,700; any day now. But do 350 Million people really see $49,700? Of course not. Yet some are using this figure to show that inequality isn’t really an issue (especially when compared to China’s $4000 GDP per capita).

But it gets better!! According to the economic war mongers, personal disposable income is down, making the real issue that the government taxes too much!

Personal disposable income is simply income after taxes. So let’s look at that!

disposable income

Yes, government is taking in more taxes, and PDI is down, but mathematically, it doesn’t add up. According to these data, all things being equal, the effective tax rate on everyone should be 25%, making the government’s tax booty around $4.3 trillion. Yet the government only took in $1.8 Trillion in taxes (about 10% of GDP).

And better yet is the idea that every man, woman, and child has 75% of their income to spend on what ever they want! Which is why people are actually only spending 1.6% on personal consumption according to the Fed.

But alas, all things are not equal. Not all children work, not all wages are the same, and not all resources within society (or an economy) are distributed evenly. If they were, it would be communism – the very thing that the people presenting this measure hate the most. In the end, these data turn out to measure nothing. They can only be used to compare the state of societies in other economies.

This entry was posted in Economics, Political Economy, Socioeconomics. Bookmark the permalink.

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