Courtesy of Mish.
Here's the question of the day: Does GDP stand for Gross Domestic Product or Grossly Distorted Procedures?
One of the reasons I ask is the latest push by countries to include prostitution and drugs sales in GDP calculations.
- Italy: Cocaine Sales to Boost Italian GDP in Boon for Budget.
- USA: The Fiscal Times reports How Hookers and Drug Dealers Could Boost US GDP.
- Spain: economists estimate that prostitution, illegal drugs, and adjustments will increase GDP since 2010 by 2.42%. That's cumulative, not additive. Methodological changes, such as counting weapons as an "investment" represents 1.55 percentage points of the change.
- France: Here's a shocker … France says No Sex, Please, We’re French. In short, France will not include sex or illegal drugs in its measure of GDP.
- UK, Ireland, Italy: The WSJ mentions the UK, Ireland, Italy, and even the United Nations in its report Sex, Drugs and GDP: the Challenge of Measuring the Shadow Economy.
From the preceding link, the WSJ reports …
The U.K. could add as much as $9 billion to the value of its GDP by including prostitution and about $7.4 billion by adding illegal drugs, by one estimate, enough to boost the size of its economy by 0.7%. Not to be outdone, Italy will include smuggling as well as drugs and prostitution.
Other nations in Europe are also poised to fall in line with a European Union call to standardize and broaden GDPs. The EU is following a "best practices" directive laid out in 2008 by the United Nations.
Best Practices Directive
The "best practices" push is on to count sex, except in France (where perhaps it would send GDP soaring to unbelievable heights).
Yet, no one counts people raising their own vegetables, a genuine product.
Sex
As long as we are counting prostitution, why not count consensual sex? What about sex between husbands and wives? What about teen sex?
Isn't the product the same? Are we counting products and services or not?
If husbands did not get sex from their wives, wouldn't some of them pay to get sex elsewhere?
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