This Presentation gives the most common ways of measuring the health of a nation's economy.

1. KEEPING SCORE
Or
Bigger, Better, Faster,
And More Powerful

2. 1. GDP
Gross Domestic Product
The total value of all the goods and services
produced within a country or economy

3. 1. GDP
Why does this matter?
Because how much we consume is limited by
how much we produce.

4. 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.

5. 1. GDP
Example: working at McDonald's

Average FT worker – 
Average FT worker –
United States Paraguay
− 40 hours/week − 40 hours/sem.
− $7.50/hr − G.1.6million/mes
− $1200.00/month − G.10000/hr
− Current
exchange:
$2.38/hr

6. 1. GDP
Example: working at McDonald's

Average FT worker – 
Average FT worker –
United States: Paraguay (Current
$7.50/hr exchange): $2.38/hr
− $60 pair of − $60 pair of
sneakers takes sneakers takes
8 work hours. more than 25
work hours.
− $5 combo meal
at McD's costs
− $5 combo meal
at McD's costs 2
40 minutes.
hours and 6
minutes of
work.

7. 1. GDP

Average FT worker – 
Average FT worker –
United States: Paraguay: Annual
Annual Purchasing Purchasing Power:
Power: $47,184.48 $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.

8. 1. GDP

Average FT worker – 
Average FT worker –
United States: Paraguay: Annual
Annual Purchasing Purchasing Power:
Power: $47,184.48 $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.

9. 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)

10. 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.

11. 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.

12. 4. Income Inequality

United States Gini 
Over time, the US has
scores: been getting more
disparate between
− 1970: 39.4 income levels.
− 1980: 40.3
− 1990: 42.8 
The gap between high-
− 2000: 46.2 income earners and
low-income earners is
− 2010: 47.0
growing.

13. 4. Income Inequality

14. 5. How BIG is YOUR Government?

$ amount of all (local,
federal, and between)
government spending
Government size = -----------------------------

GDP

15. 5. How BIG is YOUR Government?

$3,600,000,000,000
spent by
($3.6 trillion USD)
US Federal Government
United States
-----------------------------
Government size =

$14,590,000,000,000.00

($14.59 trillion USD) – 2010 US GDP

16. 5. How BIG is YOUR Government?

$3,600,000,000,000
spent by
($3.6 trillion USD)
US Federal Government
24.67% = -----------------------------

$14,590,000,000,000.00

($14.59 trillion USD) – 2010 US GDP

17. 5. How BIG is YOUR Government?

$3,603,000,000.00
spent by
($3.6 billion USD)
Paraguayan Government
19.66% = -----------------------------

$18,330,000,000.00

($18.33 billion USD) – 2010 Py GDP

18. 6. Deficit and Surplus

Surplus when the
government collects
more tax money
than it spends.

Budget 
Deficit when the
government spends
more than it collects,
and cannot pay for
itself.

19. 6. Deficit and Surplus

Surplus when a
country produces
enough to export, to
pay for what it imports.
Current


Deficit when a country
Account cannot produce enough
to export, to pay for all
that it imports.

20. 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?

21. 7. Simple Demographics

The United States is 
Paraguay is “dying
“aging”. young”
− Less workers to pay − HALF of pop. is under
for social programs the age of 25.
for retirees. − Less than 10% of the
− US health care, over pop. reaches the age
last 20 years, of 60.
extended life − At near-40%
expectancy by 8 to 10
unemployment, not
years.
enough people
− 25% of pop. is under contribute the tax
the age of 25. revenue necessary to
support social
− 13% of pop. over age
programs.
65, and growing.

22. 7. Simple Demographics

So... 
Paraguay is “dying
− Less money for young”
pension and − HALF of pop. is under
the age of 25.
health care
initiatives for − Less than 10% of the
pop. reaches the age
the elderly. of 60.
− More money − At near-40%
unemployment, not
mandated for enough people
educational contribute the tax
initiatives. revenue necessary to
support social
programs.

23. 7. Simple Demographics

So... 
Paraguay:
− Less money for − 12% gov't
pension and spending for
health care education
initiatives for − 10% gov't
the elderly. spending on
− More money health care
mandated for
educational
initiatives.

24. 7. Simple Demographics

USA 
Paraguay:
− 40% gov't − 12% gov't
spending on spending for
Social Security education
and Medicare − 10% gov't
for the elderly spending on
− 3% gov't health care
spending for
education

25. The Point?
Remember the 5th Premise?
A country is only as healthy and productive as
its people.