{"id":2931,"date":"2025-03-21T18:34:59","date_gmt":"2025-03-22T02:34:59","guid":{"rendered":"https:\/\/eliasbizannes.com\/blog\/?p=2931"},"modified":"2025-03-21T14:02:38","modified_gmt":"2025-03-21T22:02:38","slug":"two-metrics-governments-should-focus-on","status":"publish","type":"post","link":"https:\/\/eliasbizannes.com\/blog\/2025\/03\/two-metrics-governments-should-focus-on\/","title":{"rendered":"Two Metrics Governments should Focus On"},"content":{"rendered":"<p>If I were to ask you what metric governments run on, you&#8217;d probably say GDP, inflation, or unemployment. I assume you know what those are and how they\u2019re calculated, but I want to touch on the first two briefly\u2014to show just how bizarre they are.<\/p>\n<p>Let\u2019s start with GDP.<\/p>\n<ul>\n<li>It measures the health of the economy based on how much is spent. That means two parents working full-time and sending their kids to daycare counts as more valuable than a stay-at-home parent raising their own child. Spending equals growth.<\/li>\n<li>Take it further: with the rise in personality disorders, trauma, and emotionally unstable adults\u2014often linked to \u2018neglectful\u2019 parenting\u2014the money spent on counselling and therapy is also counted as \u201cgood\u201d economic activity.<\/li>\n<li>It\u2019s not hard to see how this metric has shaped our society in distorted ways. Unpaid labour and environmental damage don\u2019t factor into the equation. GDP is treated like an absolute truth, but it\u2019s more like a system running on a plug number\u2014or better yet, an axiom\u2014to make the math work.<\/li>\n<\/ul>\n<p>What we want is not more <em>spending<\/em> but less by making it <em>cheaper<\/em>. Lighting and light bulbs used to be expensive, now it&#8217;s so cheap we don&#8217;t even think about it. Why should we measure progress on expensive lightbulbs? I call this the <a href=\"https:\/\/eliasbizannes.com\/blog\/2019\/05\/the-income-ratio-problem\/\">income-ratio problem<\/a>.<\/p>\n<p>Then there\u2019s inflation, the main metric central banks focus on.<\/p>\n<ul>\n<li>Price stability with modest change is the official goal. But have you ever stopped to ask: why do prices\u00a0 have\u00a0 to<em> go up<\/em> every year? Why do we need inflation at all? You&#8217;ll fall into a rather large and scary rabbit hole if you keep asking that question.<\/li>\n<li>Take Bitcoin as an example. It\u2019s deflationary because of its fixed supply. I think that sounds like a good thing. But maybe it might take some adjusting to: are we really prepared for a world where you stop getting pay raises and your house stops appreciating?<\/li>\n<\/ul>\n<p>Underlying all of this is one core idea: <strong>growth<\/strong>. Clive Hamilton explored this 20 years ago in his book <em>Growth Fetish<\/em>. It was a fantastic diagnosis, but his proposed solution\u2014measuring \u201chappiness\u201d\u2014was lacking. I\u2019ve thought about it ever since. And after years of turning it over in my head, I think I\u2019ve landed on an answer.<\/p>\n<h4>A Better Solution<\/h4>\n<p>We already track two other metrics that should be front and centre in government decision-making: <strong>life expectancy <\/strong>and <strong>debt-to-GDP<\/strong>.<\/p>\n<p><strong>Why life expectancy? <\/strong>Because it\u2019s the thing that <em>actually<\/em> matters, right? A long average life expectancy means people are physically\u00a0 <em>and<\/em> mentally healthy. Crime is low\u2014they didn\u2019t get shot. Roads are safe\u2014people aren\u2019t dying in car accidents. The healthcare system works. The environment\u2019s probably cleaner. And unlike GDP or unemployment, it\u2019s not based on questionable sampling surveys\u2014it\u2019s grounded in actual death records.<\/p>\n<p>It\u2019s arguably our best proxy for a successful society and growth that&#8217;s better focussed on.<\/p>\n<p><strong>Why debt-to-GDP? <\/strong>Because democracies are prone to abusing the credit card. A lower debt-to-GDP ratio can be achieved in different ways: cut spending (reduce the numerator), or boost productivity and exports to grow GDP (increase the denominator). Yes, governments can raise taxes to pay off debt\u2014but overdo it, and you choke the economy. It&#8217;s a balancing act. Debt <em>can be<\/em> useful, but only when used with restraint. And restraint is sorely lacking in today\u2019s democracies\u2014especially under the influence of populism.<\/p>\n<p>Focusing on both debt <em>and<\/em> GDP creates a more balanced and accountable policy framework. And just like with life expectancy, there&#8217;s a hard reality at the end: if a government keeps piling on debt and eventually can\u2019t service it\u2014what do you think happens?<\/p>\n","protected":false},"excerpt":{"rendered":"<p>If I were to ask you what metric governments run on, you&#8217;d probably say GDP, inflation, or unemployment. I assume you know what those are and how they\u2019re calculated, but I want to touch on the first two briefly\u2014to show just how bizarre they are. Let\u2019s start with GDP. It measures the health of the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24,1],"tags":[],"class_list":["post-2931","post","type-post","status-publish","format-standard","hentry","category-society","category-uncategorized","post-preview"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/eliasbizannes.com\/blog\/wp-json\/wp\/v2\/posts\/2931","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/eliasbizannes.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/eliasbizannes.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/eliasbizannes.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/eliasbizannes.com\/blog\/wp-json\/wp\/v2\/comments?post=2931"}],"version-history":[{"count":7,"href":"https:\/\/eliasbizannes.com\/blog\/wp-json\/wp\/v2\/posts\/2931\/revisions"}],"predecessor-version":[{"id":2938,"href":"https:\/\/eliasbizannes.com\/blog\/wp-json\/wp\/v2\/posts\/2931\/revisions\/2938"}],"wp:attachment":[{"href":"https:\/\/eliasbizannes.com\/blog\/wp-json\/wp\/v2\/media?parent=2931"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/eliasbizannes.com\/blog\/wp-json\/wp\/v2\/categories?post=2931"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/eliasbizannes.com\/blog\/wp-json\/wp\/v2\/tags?post=2931"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}