An interesting essay on where our definition of “economic growth” comes from. It is a highly manipulated term.
For instance France’s hapless new president Mr. Hollande famously stated at the start of his term that he was eschewing “austerity” and instead embracing “growth.” He was of course embracing nothing of the sort. He simply embraced more deficit spending, the living on a giant national credit card. Just because one has a credit card with some room on it and one goes shopping does not mean that the goods and services purchased contribute to actual wealth or “growth.” In most cases it means the exact opposite.
But like I said “economic growth” is a highly manipulated term.
(From A View from the Trenches)
As we are in the final stage of the global bubble, I realize that we often fail to ask the most obvious questions. In this case, as every central banker tells us that his policies are directed to obtain growth, the obvious question is…how do we define economic growth? What is economic growth? Yes, yes, I know that what they do is simply monetize deficits and enable the transfer of wealth between sectors and generations, but there is also an intellectual battlefield, which we should be aware of.