Monday, March 30, 2009

GDP by Year and the Myths it Destroys

Made curious by discussions of the impact of various government programs on the economy, I went and dug up the GDP for the United States for every year since the 40's, and here were the results at the end of each decade, adjusted for inflation to 2000 levels:

1940 $1,034B
1950 $1,777B
1960 $2,502B
1970 $3,772B
1980 $5,162B
1990 $7,113B
2000 $9,817B
2008 $11,653B

That didn't yield any obvious insights, so I calculated the growth by decade, and here are the results:

1940's 72%
1950's 41%
1960's 51%
1970's 37%
1980's 38%
1990's 38%
2000's 48% (adjusted pro rata for 2010)

OK, now we are getting somewhere. Essentially four of those decades are within a few points of each other, with three outliers: the 40's, 60's, and 00's. Now gee, what major events went on in those decades that tend to have a positive impact on GDP?

Wars. Long, drawn out, wars. We had WWII in the 40's, Viet Nam in the 60's, and of course our beloved Iraq War in the 00's. So what does this tell us? Is all the talk about budgets and investments in infrastructure and trickle-down all so much empty rhetoric? Are we devoid of serious influences on our economy besides wars?

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