RSSU.S. Gross Domestic Product 1945 - 2007
The preceding charts have each been expressed in dollars. That makes the charts simple and easy to understand, but it does not provide an accurate indication of the size of the numbers relative to the U.S. economy at a particular point in time. For example, 1980 government spending totaled $591 billion whereas 2007 spending totaled $2.730 trillion—over 450% more in terms of dollars. However, at least two very large factors come into play that make it impossible to accurately compare spending in these two years. The first is inflation. At the end of 2006, one dollar was worth only 41 cents of a 1980 dollar. The second factor is population. In 1980, the U.S. population was approximately 227 million; at the end of 2007 the U.S. population had grown to approximately 302 million.
To more accurately compare numbers from year to year, economists use a measurement known as Gross Domestic Product, or simply GDP. In it simplest definition, GDP is the value of all goods and services produced within a nation in a given year. This chart illustrates the GDP of the United States from the end of World War II in 1945 through 2007.
3 Responses to “U.S. Gross Domestic Product 1945 - 2007”
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June 17th, 2008 at 6:10 pm
WOW! It took almost 200 years to reach 1 Trillion dollars of GDP, but then only ten more years to reach 2, ten more years to reach 4, ten more years to reach 8. This reminds me of the power of compounding interest - it must be nice to be the (privately owned) Federal Reserve and not the debtors.
June 17th, 2008 at 10:20 pm
Thank you Ross and team for contributing to the effort to raise awareness on these issues in a constructive way! As a GenXer, soon to be father of two, son of a 33-year Army war veteran, an on-going student of economics, and AMT tax payer I am keenly aware of this challenge that our great country faces.
The presentation is excellent but please consider two items of constructive feedback:
1. On slide 34 (or 33) listing four ways in which we can bring our fiscal projections into balance (e.g., raise taxes—tax rates, reduce discretionary spending, reduce entitlement spending / commitments, etc.), please consider including “Enhancing economic growth” as a fifth element to an overall solution. I agree that economic growth alone cannot generate the revenue needed to bring us into balance but it can provide a significant contribution towards solving the problem if we don’t neglect it. Please reference several years of work on this topic at http://www.optimist123.com (The Skeptical Optimist – Steve Conover).
2. Avoid stating or implying that we need to pay off the entire national debt to address the problem. I’m not saying that our current national debt isn’t a burden in terms of required interest payments. However, if we can stop incurring on-going budget deficits (stop adding to the national debt) then over time the national debt will become a smaller and smaller interest payment burden as the economy and total tax revenues grow. I understand that talking about the sheer size of the national debt is attention grabbing but in the end it is disingenuous when the goal is to provide a clear understanding of the problem—the problem being how we can take care* of all Americans in their elder years without destroying economic vitality in the process. Totally or even substantially paying off the current national debt has very little to do with the main problem.
*Assuming we as Americans believe that Social Security, Medicare, and Medicaid are the primary means by which elder Americans should be taken care of but that is a larger debate that this problem if it becomes painful enough may force us to reconsider.
Again, thank you for contributing to this debate in a style and genuine love of country unique to Ross Perot. Thank you!
October 9th, 2008 at 6:48 pm
Thank you very much for perotcharts.com!
Do you think you could develop a chart for GDP that does not factor in Service, but only real globally marketable production?