"So the simplest way to increase the GDP in a great way is inflation."

Because of this GDP will often be given in PPP or purchasing power parity. Or in other words how much you can buy with your money. PPP GDP for developing countries is larger than nominal GDP but it doesn't change much. Nominal GDP is important because it tells you how many goods you can buy from other countries. In our increasingly globalized world the difference between nominal and PPP GDP should get smaller over time.

"So, a good economy alone doesn't make our life better."

Not alone but a good economy is the necessary foundation to care about other things. If you have nothing to eat you won't care about the environment either. Only our capitalism-created efficiency at doing basic things like growing food/building houses etc. has freed up enough people to go into medical care, research new technology like air filters etc.

I know, the corrected GDP may be better, but it's not perfect either. As I said, red cross produces values, but that doesn't count in the GDP. And because of completely new products and changing price structure it's hard to measure the inflation and how it affects real life. And growing economy may be a base for better life, but it's never good enough. Here in germany economy (measured by GDP) was growing recently and unemployment decreased ... but poverty has increased.

"was growing recently and unemployment decreased ... but poverty has increased."

The economy has been growing for one damn year after a decade of slump. Besides our(I am German too) new great coalition has added a 3%VAT increase in this year just to sweeten it up. But in the end this is lamenting on a high level: even the poor people in Germany are better off (financially) than most people have been in communist countries.

Yeah, that's true. It was only an example, that there is not always a positive correlation of these things. And to make a thing clear. I think the capitalistic system is the best, that we have invented so far. I only want to remember the people, that it isn't perfect and we always should try to improve it.

Hmm..

Capatalism works well, but you need a good setup (the USA) private ownership etc.

Communism looks good at a glance but does sustain itself, like the government runs all forms of media and private ownership and buisinesses

Interesting theory at the end.

And I totally agree on the whole part about wanting to work for the better of everyone. Wich is why you will never see the USA use it even if economists suddenly declare communism the best system ever hands down. USA has too many varied people to have everyone feel a national identity.

And just a thought but to those who say its bad for the government to own all businesses what would be so bad about the government making money directly from businesses instead of taxing everybody directly? And does it really make a difference in the end if the government makes all the profits as opposed to some intangible entity?       

@highwaystar101 LOL do you seriously think that ANY current government is not propaganda based?  

@Mnementh:

As Kyros points out its very very to adjust GDP for inflation.

Money Saved: There are two issues with your argumenent here.
1. You are assuming that people buy only based on needs not desires and thus that the people who save money on the cars will not spend it on other goods they desire.
2. Most all people put their saved money in banks or stocks once they have a substantial amount of saved money. Through these intermediaries the saved money then enters the economy.

Hence, the money saved will almost certainly enter the economy. Combine this with the fact that more people will buy cars at the lower price than would have otherwise done so and the total amount of economic activity does go up.

Volunteers: As far as I know you are right about these. But when you consider the total volume of activity in any given country, I'd imagine the amount of volunteer-labor hours compared to paid-labor hours is extremely small.

Industrial Revolution: I've never said that economic improvement immediately correlates with an improvement in lifestyle, only that it eventually does. Though your evidence (as you cited it) is largely qualitative (do we really know whether quality of life got worse? : ( ), I'm sure no one wants to actually undo the industrial revolution. Eventually, it lead to a stratospheric increase in the quality of living.

I've never said that capitalism is perfect for the world either, except in reducing market inefficiency =D. That being said I do think the world would benefit from more free trade, especially the elimination of farm subsidies in the US and Europe.

My problem with communism is that it is so incredibly inefficient, that any beneficial distribution of wealth to the poorest people is unlikely to make up for the loss of wealth caused by the inefficiencies.

@bdbdbd's ideal capitalist society: Capitalism as currently defined is simply about eliminating all barriers to absolutely free markets. What on earth does everyone working only for an elite have to with free markets? Nothing. Under a totally free market people don't work for the smallest wages to stay alive, they work for whatever the market (not some hegemonic elite) decides the wage for their current job to be, and if its to low they choose not stick with that job.

@NintendoOwnsMii: re: Government owned businesses.

Will the government create or even allow competition for itself? If not, its essentially giving itself a monopoly, which is inefficient (monopolies can sell at their own price instead of the market price so they sell fewer goods at a higher price to secure the most profit for itself compared to how things would have been under competition).

Under most economic theory, the government should primarily only perform economic activity where no one can effectively not use its product. The quintessential example of is national security: I can't decheck national security on the list of government services I want because so long as I live within my country I will be protected by it anyway. Thus, it makes sense for the government to charge everyone for it, there's no feasible alternative.

to make this clear capitalism is no utopia. And you will always need a social component. But I think the foundation for the economy will always have to be of possession and competition everything else has failed terribly.