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> Doing so could potentially complicate or distort a fundamental measure of the U.S. economy’s health. Government spending is traditionally included in the GDP
by evil-olive 2y ago
> Doing so could potentially complicate or distort a fundamental measure of the U.S. economy’s health. Government spending is traditionally included in the GDP because changes in taxes, spending, deficits and regulations by the government can impact the path of overall growth. GDP reports already include extensive details on government spending, offering a level of transparency for economists.
I'm reminded of Trump's opposition to covid testing in 2020 [0]. look for ways to sweep the problem under the rug, rather than actually fixing it.
if you run a restaurant, you don't care where your customers' money comes from - it could be a public- or private-sector job, or a retirement account, or whatever.
if people lose their jobs, and as a result have to tighten their spending and go out to eat less, your restaurant loses business. that's true regardless of where they were employed before losing their jobs.
if your restaurant loses enough business, you need to close it down, and lay off all your employees. the ripple effect of that is one of the ways recessions happen.
the logical next step of this would be to publish two sets of unemployment statistics, and argue that the numbers that exclude recently laid-off government employees are the "real" numbers.
> “If the government buys a tank, that’s GDP,” Lutnick said Sunday. “But paying 1,000 people to think about buying a tank is not GDP. That is wasted inefficiency, wasted money. And cutting that, while it shows in GDP, we’re going to get rid of that.”
this is a rather poor choice to use as an example of wasteful government spending - because for years the government has been buying tanks that the military itself says are not needed.
from [1] more than 10 years ago:
> The new defense spending bill includes $120 million for tanks that the Army has repeatedly said it doesn't want.
and from [2]:
> The hundreds of millions of dollars in earmarks that Congress has approved for upgrades to the M1 Abrams are so “vital” for national security that the Department of Defense (DOD) has more than 2,000 of the tanks parked in a California desert.
> ...
> Despite longstanding and clear opposition from the Pentagon, members of Congress continue to argue for funding and have earmarked hundreds of millions for the M1 retrofit program. On April 20, 2012, a bipartisan letter insisting on the continuation of the program from 173 representatives reached the desk of Secretary of Defense Leon Panetta. Although the tank plant is located in Lima, Ohio, its suppliers are spread across the country, which explains the widespread support.
> Like many private companies pursuing favorable legislation in the nation’s capital, General Dynamics is heavily invested in lobbying. According to data collected by the Center for Public Integrity and the Center for Responsive Politics, General Dynamics’ Political Action Committee (PAC) has contributed a total of $5.3 million to current members of the Senate Committee on Armed Services (SCAS), HASC, and the Senate and House defense appropriations subcommittees since January 2001. The M1 is championed by powerful allies, counting among its supporters SCAS Chairman Carl Levin (D-Mich.) and HASC Chairman Buck McKeon (R-Calif.).
0: https://www.statnews.com/2020/07/20/trump-said-more-covid19-testing-creates-more-cases-we-did-the-math/ https://www.statnews.com/2020/07/20/trump-said-more-covid19-...
1: https://www.military.com/daily-news/2014/12/18/congress-again-buys-abrams-tanks-the-army-doesnt-want.html https://www.military.com/daily-news/2014/12/18/congress-agai...
2: https://www.cagw.org/content/tanking-taxpayers https://www.cagw.org/content/tanking-taxpayers
- jfengel 2y ago> “If the government buys a tank, that’s GDP,” Lutnick said Sunday. “But paying 1,000 people to think about buying a tank is not GDP. Is thinking about how to run a company GDP? Perhaps we should include CEOs from the GDP calculation as well.