Commerce Secretary Pledges to Remove Gov't Spending as part of GDP

Why, Because it's really a lie or a fudge. It's part of the longstanding war on truth and reality starting in 1934 when politicians were eager to exagerate growth numbers; ie., 100 years of fibbing.

From Reuters:

WASHINGTON, March 2 (Reuters) - U.S. Commerce Secretary Howard Lutnick said on Sunday he would strip out government spending from the gross domestic product (GDP) report, but gave no indication how soon this change might happen, while dismissing fears of a possible recession.

"You know that governments historically have messed with GDP, [Doug here: since 1934, the depression era—when government was looking to create “rosy” economic numbers—just like today]." Lutnick said during an interview on Fox News Channel's "Sunday Morning Futures" program.

"They count government spending as part of GDP. So I'm going to separate those two and make it transparent." [Doug here: presumably, he’ll report both sets of numbers]

Howard William Lutnick, now commerce secretary, is an American businessman. Lutnick graduated from Haverford College in 1983.

From Without Federal Spending, What’s Left of US GDP Growth from Justin Fox at Financial Advisor,

…transfer payments, in which the government takes money from one set of taxpayers and gives it to another not included in GDP on the gov’t side. But that money shows up in national GDP accounts as spending by the recipients, and there’s no way to extricate them without making the whole thing fall apart.

And the growing share of that transfer money being taken from future taxpayers—in the form of government debt—is worthy of attention.

The government spends money that it doesn’t have (via debt) and it temporarily boosts economic numbers—until the whole scheme falls apart, that is.

Borrowing money, in another vernacular, is termed “going into the hole.” So, the government is going into the hole and counting that money as GDP. I think that is fundamentally a lie.

US “Growth” Minus the Debt (otherwise known as “Going in the Hole”)

Here’s some great info from FA, Financial advisors, showing how the size of our economy is likely exaggerated because we ignore the fact that we’re going in the hole.

Note that since 1980, REAL GDP has been mostly negative from about 2 to 4%, sometimes negative 10%

When the USA and EU fall apart and they default on their debt (inflation and/or outright default), it will be reminiscent of the old Soviet Union when it fell apart. The world will know that the size of the US and EU economies were exaggerated and that they were much smaller than advertised.