James_K:
I am an economist and I assure you economists don't ascribe to the "measured GDP is everything" view you attribute to them.
Aside from the standard arguments about the shortcomings of GDP, my principal objection to the way economists use it is the fact that only the nominal GDP figures are a well-defined variable. To make sensible comparisons between the GDP figures for different times and places, you must convert them to "real" figures using price indexes. These indexes, however, are impossible to define meaningfully. They are produced in practice using complicated, but ultimately arbitrary number games (and often additionally slanted due to political and bureaucratic incentives operating in the institutions whose job is to come up with them).
In fact, when economists talk about "nominal" vs. "real" figures, it's a travesty of language. The "nominal" figures are the only ones that measure an actual aspect of reality (even if one that's not particularly interesting per se), while the "real" figures are fictional quantities with only a tenuous connection to reality.
It's not so much a matter of being overconfident as it is not listing the disclaimers at every opportunity. The Laspeyres Price Index (the usual type of price index) has well understood limitations (specifically that it overestimates consumer price growth as it doesn't deal with technological improvement and substitution effects very well), but since we don't have anything better, we use it anyway.
"Real" is a term of art in economics. It's used to reflect inflation-adjusted figures because all nominal GDP tells you is how much money is floating...
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