Today you’ll be hearing a lot about this latest bit of bad —really, really bad —economic news:
Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 0.1 percent in the first quarter (that is, from the fourth quarter of 2013 to the first quarter of 2014), according to the “advance” estimate released by the Bureau of Economic Analysis.
There are a lot of reasons why slow or negative economic growth is terrible, and I plan to write more about that soon. But many people don’t really understand why economic growth matters. While the issue is complex and requires some nuance to fully explain, the simplistic answer is that economic growth matters because of babies. If you love babies — and want more of them around — you should love economic growth.
I’ve written about this topic before, but today seems an ideal time to revisit the issue. Before we explain the baby-GDP connection, though, let’s consider the consequences if there were to be a long period in the U.S. with no economic growth: