The Problems with Using GDP/GNP as a Measurement to Compare Welfare Between Countries

As Bill Clinton’s campaign strategist once famously said, “It’s about the economy stupid!” This world is run by money, and inevitably there are the haves and the have-nots. The welfare state is a system which offers a grouping of benefits geared towards helping all members of society achieve prosperity and be successful members of society, however it is often criticized and debated in the US. The welfare state is not obsolete, as it fosters educational development to help solidify the future, and keeps from creating a reliance on welfare, all without excessively depleting the US of its monetary funds.

The analytical findings of Brady, D.( 2009, p.81) stated that “As countries devote a larger share of their economy to welfare, poverty declines steeply.” This happened to Scandinavia, Finland, and Sweden, and European continental countries like Netherlands and Belgium. USA was identified to have high poverty and low welfare expenses. He also made clear that poverty is not necessarily increased by higher welfare generosity.(p.84) and further says that it benefits all rather than just “the elderly or men” (p.87). The 5 features of welfare state were historically proven to reduce poverty through greater generosity with (1) social welfare expenditures, (2) expenditures for public health, (3) social security, (4) government expenditures, and (5) “decommodification” (p.91). Brady, D. (p.92) also contends that public employment is less effective than welfare state generosity as a

GDP, or gross domestic product, is the sum total value of all goods and services produced by a country within a given year. To achieve this sum, everything produced and exported, all of the money spent by consumers and government, investments, and many other contributing factors are calculated and combined. A nation’s GDP is used as the main indicator of the economic status of that nation. In general, the higher a country’s GDP is, the greater the health of that country’s economy. However, GDP is not as helpful or accurate a calculation as “real GDP”. Real GDP is a term that refers

“This, by the way, is the welfare state in action: It’s a whole bunch of special interest groups screwing consumers and taxpayers, and making them think they're really benefiting” (Murray Rothbard).

We will begin with real GDP. Real GDP, an acronym for Gross Domestic Product, is the total value of final goods and services during a particular period or year adjusted for price changes. The GDP is an indicator of a country’s economic health. Final goods and services definition is a goods consumed rather than used for further processing. The Real GDP is increased or decreased based Inflation or deflation.

Every year Americans pay $59 billion on welfare, and that is just the traditional welfare that doesn't even include the other expenses our tax dollars pay for (Sinn). In 2013 a law was passed in North Carolina that made it so that everyone that was on welfare or wanted to get on welfare would have to be checked to make sure they haven't been convicted for anything (federal and state laws and regulations). The states should make it required that everyone that wants to be on welfare should be drug tested and have background checks. The state should also regulate what they spend their money it on, working in a grocery store i have noticed that people spend more of the welfare money on junk food, TV dinners and unhealthy food. They should set regulations such as WIC has done so that our tax dollars are better being spent. The people will still be able to get enough food and it will help them get the nutrition they need to get back on their feet.

GDP: Gross Domestic Product per capita by Purchasing Power Parities (in international dollars, fixed 2011 prices). The inflation and differences in the cost of living between

h. Distribution is ignored in calculating GDP, yet distribution is clearly relevant in using GDP to measure the degree to which the economy is

In the preamble to the U.S. Constitution is written that the Constitution was ordained to promote the general welfare among other things. Welfare is the delivery of a minimal amount of security and social upkeep for all citizens, sometimes referred to as public aid (Wikipedia). When the great depression hit the country so hard in the 1930s, state found it difficult to support the growing population of its citizens in need of assistance meeting basic needs. It was time for the government to make good on its promise of promoting the general welfare. Since its beginnings in the 1930s the welfare system has affected the lives of millions of Americans, but not without its share of controversy and change.

It is also important to recognize how many low-income families are unable to escape poverty due to the lack of protection from the hidden implicit fees or “poverty taxes” that burden those struggling financially. Many of these costs stem from the practices of payday lenders who capitalize on the impoverished and their inability to procure loans from traditional banks. When needy individuals possess poor credit scores or lack ample savings, their inadequate financial histories prevent them from taking out loans from conventional banking institutions. Consequently, when a situation arises where an immediate credit-blind loan is required, they are forced to turn to these independently run subprime lenders and their excessively high interest rates.

I started this research project the same way I start every research based assignment; by going to the schools library website. I started this project with the belief that welfare is a good idea when not abused but has quickly lost meaning and has now created generations of dependence. I began my welfare search looking for the positives and negatives of welfare as well as possible reforms. I thought this was going to be easier than what it was but my initial sources were coming up short in my opinion for what I was specifically looking for. I search everything I could about my topic including welfare, welfare reform, welfare and the economy, as well as welfares effectiveness. I then began to look outside the libraries website and ventured into

A 2000 word comparative review of the ways different countries approach welfare, as discussed on the unit.

This is due in part because of the unequal wealth distribution. The top one percent of the richest people own forty six percent of the global wealth. This wealth being held by the rich would not be a problem if they were not so selfish with their earnings. The distribution of wealth leads to the subsequent unequal distribution of resources. Some issues this raises are human settlement and population distribution, economic activities, trade and quality of life. Certain indicators can be expended in order to measure a nation’s wealth and they include: Gross Domestic Product (GDP), Gross National Income (GNI) and Human Development Index (HDI). The Gross Domestic Product is the total value of all goods and services. This is a good indicator of what the country is like in relation to their products being sold. The GNI is the GDP plus the income from foreign investors minus the money paid out to foreign investors. The GNI and GDP are not always equal between or within countries. The HDI captures the health, education and income of any given area. It is often a more accurate depiction of what the people are like.

The welfare state in Britain began when the Labour Party come into power in 1945. Their aim was to introduce a organised system that would begin to tackle the existing poverty situation that was based on the Poor Law Acts. The government recognised and acknowledged the need for these changes and reducing the inequalities that existed via the social classes and counties. These differences included the levels of unemployment, availability to public health services and workers that were covered by occupational insurance. Servant William Beveridge shaped the principles and development of the welfare state. Adam Smith argued and rebelled against the welfare state principles under the conservative government. Smith argued that individuals control

According the to World Bank a countries income level is determined by it’s Gross National Product (GNP) per capita, which is the value of all final goods and services produced in a country in one year (gross domestic product) plus income that residents have received from abroad, minus income claimed by nonresidents divided by its population.("How We Classify Countries,") This measure is an indication of how well the population in a country lives. When comparing country income levels there are several differences that can be found between each group, listed in order of examination they are GNP per capita, political stability, life expectancy, and access to education.