@ niggly,
I agree with you that most people don't understand the relevance of GDP, etc. Unfortunately, that means that politicians can use those very statistics to give an impression that the country is doing is doing well. For example, they constantly talk about bringing down the deficit, but ignore that the country's debt has gone through the roof. It's a bit like keeping your current account out of the red by borrowing more and more money.
That's why people would do themselves a favour by trying to find out some of the basics of macro-economics and there are some excellent videos on YouTube and the BBC does some straightforward explanations. People don't need to go into minute details to understand the principles.
Thatcher did a brilliant job of persuading people that a country's economy is like a household budget and that we shouldn't spend beyond our means. Unfortunately, economies don't work quite like that. A household can stop spending quite so much without damaging the local economy, but if everybody does the same, it won't be long before shopkeepers' incomes are affected. They are also consumers, so they will have to stop spending so much...and so it goes on. That's what is so wrong about austerity.
nigglienelly: "People want to be able to relate their own circumstances with what they are being told in language they can easily understand and feel enthusiastic, (or not) about. In other words politicians need to learn to inspire a crowd"
I don't really like invoking Godwin's Law, but Hitler was a master of relating to people's circumstances and prejudices, used easily understandable language and was amazingly inspirational. People need to be critical and look for facts.