Making Sense of "Made in the USA"
Why people care about GDP is that, though not a direct indicator, it's often used as a measure of economic health of a country and overall standard of living. The reasoning is fairly straightforward: Because GDP is a measure of everything a country sells, if its GDP is high, that means the country has a high amount of wealth because it's selling a lot. And while level of wealth doesn't necessarily correlate to a high standard of living (other factors, such as wealth distribution, employment rates and many others also play parts), it does correlate to overall economic activity, and an active economy is generally a healthy one. (If you're selling things, you're paying laborers, making investments, collecting taxes, etc.) Hence, why people care about and measure GDP. If it's high, you're doing okay, if it's low, you're not.
SO WHAT'S GDP HAVE TO DO WITH AMERICAN MANUFACTURING?
GDP and manufacturing connect over how GDP is measured. There are a couple ways to calculate GDP, but when trying to understand manufacturing's role, it's helpful to use the "consumption" model.
The consumption model of GDP is based around the idea that everything a country sells is equal to everything it consumes, i.e., a country and its people do work in exchange for an equal amount of goods and services. Because they're equal (you can only consume what you can buy, you only buy what you can consume), you can calculate a country's GDP if you know what it consumes. The GDP consumption equation looks like this:
GDP = Infrastructure/Business Investment from Private Citizens + Private Citizen Consumption + Government Spending/Consumption + Total Exports - Total Imports
The equation is helpful for understanding the impact of American manufacturing because it's the simplest way to illustrate its entrenched position within our economy.