KEEPING SCORE

Or

Bigger, Better, Faster, And More Powerful

1. GDP

Gross Domestic Product

The total value of all the goods and services produced within a country or economy

1. GDP

Why does this matter?

Because how much we consume is limited by how much we produce.

1. GDP

Why per capita?

(GDP divided by it's population)

Example: Paraguay's GDP goes up 2%. Cool!Paraguay's population goes up 5%...

...and Paraguay is actually getting poorer, because it's not producing enough to keep up

with the extra people.

1. GDPExample: working at McDonald's

Average FT worker – United States

40 hours/week $7.50/hr $1200.00/month

Average FT worker – Paraguay

40 hours/sem. G.1.6million/mes

G.10000/hr Current

exchange: $2.38/hr

1. GDPExample: working at McDonald's

Average FT worker – United States: $7.50/hr

$60 pair of sneakers takes 8 work hours.

$5 combo meal at McD's costs 40 minutes.

Average FT worker – Paraguay (Current exchange): $2.38/hr

$60 pair of sneakers takes more than 25 work hours.

$5 combo meal at McD's costs 2 hours and 6 minutes of work.

1. GDP

Average FT worker – United States: Annual Purchasing Power: $47,184.48

Average FT worker – Paraguay: Annual Purchasing Power: $4,533.10

Afghanistan´s GDP per capita is less than $950.00. They have almost 200,000 cases of Hansen's disease

(leprosy). A $3 antibiotic will cure a mild case. A $20 regimen will cure a more severe case. The World Health

Organization provides the drugs for FREE. The Afghani health care infrastructure is so war-torn that it

cannot identify and treat the ones who need care.

1. GDP

Average FT worker – United States: Annual Purchasing Power: $47,184.48

Average FT worker – Paraguay: Annual Purchasing Power: $4,533.10

200,000 Afghanis are horribly disfigured by a disease that costs $3 to cure.

This is what it means to make $950 per year.

2. Unemployment

The fraction of able workers who want to work, but can't find a job.

A country's GDP has to grow at least 3%,or else unemployment will rise.

(Okun's Law)

3. Poverty Rate

The Poverty Line is the least possible amount of money necessary to buy the absolute basics

for subsistence.

The Poverty Rate is the percentage of people whose incomes are below the poverty line.

4. Income Inequality

The Gini Index

0 = Total equality (every worker, regardless of field, skill, or expertise, makes exactly the same amount of money)

100 = Total inequality (all income is generated and earned by one person)

Gini trends are measured over time.

4. Income Inequality

United States Gini scores:

1970: 39.4 1980: 40.3 1990: 42.8 2000: 46.2 2010: 47.0

Over time, the US has been getting more disparate between income levels.

The gap between high-income earners and low-income earners is growing.

4. Income Inequality

5. How BIG is YOUR Government?

Government size =

$ amount of all (local, federal, and between) government spending -----------------------------

GDP

5. How BIG is YOUR Government?

United States Government size =

$3,600,000,000,000 ($3.6 trillion USD) spent by

US Federal Government -----------------------------

$14,590,000,000,000.00 ($14.59 trillion USD) – 2010 US GDP

5. How BIG is YOUR Government?

24.67% =

$3,600,000,000,000 ($3.6 trillion USD) spent by

US Federal Government -----------------------------

$14,590,000,000,000.00 ($14.59 trillion USD) – 2010 US GDP

5. How BIG is YOUR Government?

19.66% =

$3,603,000,000.00 ($3.6 billion USD) spent by

Paraguayan Government -----------------------------

$18,330,000,000.00 ($18.33 billion USD) – 2010 Py GDP

6. Deficit and Surplus

Budget

Surplus when the government collects more tax money than it spends.

Deficit when the government spends more than it collects, and cannot pay for itself.

6. Deficit and Surplus

Current Account

Surplus when a country produces enough to export, to pay for what it imports.

Deficit when a country cannot produce enough to export, to pay for all that it imports.

7. Simple Demographics

Why (if all the above were equal) does the US government spend a larger percentage of its budget on Social Security than Paraguay?

7. Simple Demographics

The United States is “aging”.

Less workers to pay for social programs for retirees.

US health care, over last 20 years, extended life expectancy by 8 to 10 years.

25% of pop. is under the age of 25.

13% of pop. over age 65, and growing.

Paraguay is “dying young”

HALF of pop. is under the age of 25.

Less than 10% of the pop. reaches the age of 60.

At near-40% unemployment, not enough people contribute the tax revenue necessary to support social programs.

7. Simple Demographics

So... Less money for

pension and health care initiatives for the elderly.

More money mandated for educational initiatives.

Paraguay is “dying young”

HALF of pop. is under the age of 25.

Less than 10% of the pop. reaches the age of 60.

At near-40% unemployment, not enough people contribute the tax revenue necessary to support social programs.

7. Simple Demographics

So... Less money for

pension and health care initiatives for the elderly.

More money mandated for educational initiatives.

Paraguay: 12% gov't

spending for education

10% gov't spending on health care

7. Simple Demographics

USA 40% gov't

spending on Social Security and Medicare for the elderly

3% gov't spending for education

Paraguay: 12% gov't

spending for education

10% gov't spending on health care

The Point?

Remember the 5th Premise?

A country is only as healthy and productive as its people.