Robert Kennedy, when seeking the Democratic presidential nomination in 1968, remarked that GDP measures everything except that which makes life worthwhile.

1. What do you think he meant by this statement? What do you think he feels is missing when measuring GDP?

2. Do you feel that economists are guilty of discrimination when they don't count the long hours a stay-at-home mother or father spends raising a family?

3. Table 14.4 in your text (pg. 383) compares real GDP per person in the US between 1960 and 2016. This shows real GDP per person in 2013 at almost 3 times that of 1960. Does that mean that people in the US are 3 times happier in 2013 as compared to 1960?

4. During the 1960s, the potential growth rate of GDP grew at an average of 20.8% per year. Since 1970, the growth rate of potential GDP has been about 1.9% a year (pg. 383). Using this as a gauge, explain why you think the US economy is either better or worse off today than it was 50 years ago.

5. If underground production, especially the production and sale of illegal drugs, were counted in GDP, it would have made up about 16% of GDP. Explain why you feel that economists and the government do not count these goods as part of GDP.

6. Even though the per person real GDP in the US is among the highest in the world, explain why you feel that this may be misleading in terms of the quality of life for individuals in the US (consider leisure, environment, health, social justice, etc.).

Robert Kennedy's statement suggests that GDP (Gross Domestic Product) fails to capture the true essence of a fulfilling and meaningful life. He implies that there are aspects of human well-being and quality of life that cannot be quantified or measured solely by economic indicators like GDP.

Kennedy likely feels that GDP misses important elements that contribute to a meaningful life, such as personal relationships, happiness, health, environmental sustainability, leisure time, social justice, and overall human welfare. These aspects are not adequately captured by GDP, which primarily measures economic production and consumption.

Regarding the discrimination against stay-at-home parents, it is a subjective matter. Some argue that GDP undervalues the contributions of parents who dedicate their time to raising a family, as it does not account for their unpaid work. This perspective views GDP as discriminatory towards certain activities that are vital for societal well-being but are not monetarily compensated.

The increase in real GDP per person from 1960 to 2013 does not necessarily mean that people in the US are three times happier. Happiness and quality of life are multifaceted and influenced by various factors beyond economic growth, such as social connections, mental well-being, and personal fulfillment.

The US economy today may be considered better off or worse off than it was 50 years ago depending on various factors. The lower potential growth rate of GDP since the 1970s suggests slower economic expansion, but it does not encompass all dimensions of economic well-being. Factors such as income inequality, technological advancements, environmental sustainability, and social progress also play crucial roles in assessing the overall state of the economy.

The exclusion of underground or illegal activities from GDP measurement is due to the difficulty of accurately estimating their value and the ethical considerations associated with endorsing or incentivizing such activities. It is challenging to account for illegal drug sales and other illicit activities within the framework of official economic statistics.

While the per-person real GDP in the US may be high, it does not provide a comprehensive measure of quality of life. Factors like leisure time, environmental conditions, healthcare access, social justice, and overall societal well-being are critical aspects that can significantly impact individuals' quality of life. Thus, relying solely on GDP to assess the well-being of individuals in the US may be misleading.

Therefore, Robert Kennedy's statement emphasizes that GDP fails to capture the full spectrum of what makes life worthwhile and fulfilling. The limitations of GDP in measuring subjective aspects of well-being, the exclusion of unpaid work, and the inability to capture non-monetary factors highlight the need for a more holistic approach to evaluating human welfare and societal progress.

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