GDP: For First Time On Record, Canadians May Be Wealthier Than Americans

[Ron Obvious]

18. GDP is not a great indicator of wealth anyway.

As I understand it, GDP is merely the sum total of all economic activity in a given year, which is then averaged to the population. It's a poor indicator of wealth.

If, for example, I live in country A, get cancer and have to spend $30,000 of my own money for treatment, the GDP of country A goes up by $30,000. If strong environmental regulations in country B prevented me from getting cancer in the first place, its GDP then suffers for the money not spent. As a denizen of country A, I certainly wouldn't feel any wealthier over it.

Also, averaging (calculating the mean as opposed to the median) is far too susceptible too outliers. If Bill Gates were to walk into a homeless shelter, the average net worth for the room he's in could well be over a billion dollars, but that's hardly a worthwhile indicator.

Spending money on useless wars and overspending on education and medical care owing to a lack of a decent universal healthcare system may all increase GDP, but do little for the wealth of a country, especially if the wealth is concentrated in fewer and fewer hands.

I didn't even mention currency fluctuations yet.

I'd say the median Canadian has been better off than the median American for quite a bit longer than this.