Would it make more sense to use total tax revenue instead of GDP when analyzing certain data like national debt for example? It works on a micro level, your income is usually the primary factor when a bank loans you money for example. I’d be interested to know what the US debt/revenue ration is compared to other countries. I’m guessing it’s off the charts but I can’t find tax revenue stats for other countries.
No, no aggregate measures of the economy make sense and are fudged wildly by the honest federal employees who assemble them. The economy is not a bunch of aggregates but the product of a huge number of transactions entered into freely by a giant number of people. The only thing these aggregate measures do is give policy makers ignorant of economics the ability to judge how much to steal or constrain people and not throw the rest of the society into chaos. Of course often the chaos seems to bite them in the behind like the dot com bust or the housing bust.
Yes, it would make more sense. In fact, Robert Murphy just mentioned that on his blog a few days ago.
There seems to be a contradiction here. On the one hand many Austrian schoolers say that aggregate measures are useless. On the other hand they also say they were the only ones who saw the collapse of 2008 coming. How can you make a prediction without aggregate measures?
Interesting. So did Peter Schiff. He mentioned that Greece’s deficit/tax revenue was 1.3 but the US was 1.6.