The Losses of the United States Gross Domestic Product

Below is a graph of the United States Gross Domestic Product (GDP) showing three important economic history facts. (The measure is in real (1992) dollars, i.e. is corrected for inflation.)

• (1) The growth rate was steady at 2.70 % per year from 1950 to 1973. (Economists sometimes refer to this as "The Golden Era")
• (2) The growth rate from 1973 to 2003 fell to only 1.13 % per year. (Some economists attribute this to the breakdown of the Bretton-Woods foreign-exchange system)
• (3) The product was frequently reduced by recessions -- times when some of the workforce was idle.

The recovery rate from these recessions gives a false impression of a temporary high rate of growth of the GDP. Politicians and most economists brag of this false growth rate.

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These elements may be seen more clearly in the simple graphs below. Here the GDP is expressed per person: (The "Reagan-Bush" time marker is for reference only.)

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The next graph shows, in colored shading, the areas of losses due to recessions and the reduced growth rate since 1973.

Finally, the third graph show the calculated cumulative loss of product caused by recessions and fallen growth rate.

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REMARKS: The graphs show GDP per person. Multiply the dollars by 2.7 to get the approximate dollars per family. These losses are forever. History cannot be replayed. But to understand the significance, imagine those cumulative dollars being placed in your hands today!