Steady, Large Increases in Govt. Spending's Part of "Economic Growth"

[swag]

Conservatives allegedly hate big government, but under conservatives government is only getting bigger and bigger, and contributing an increasingly large amount of borrowed money to US "economic growth" as measured by GDP:



Commentary excerpt from The Prudent Investor:

http://prudentinvestor.blogspot.com/2005/10/us-gdp-growth-through-govt-spending.html

While most market participants and bloggers - summed up at macroblog - cheered the surprisingly strong preliminary growth figure of 3.8% (Q2: 3.3%) a look at Econbrowser's chart (and the BEA press release) shows that government spending has become a major factor in the strenghtening process.

I do not consider this great news. While this can be partly explained by hurricane-induced clean-up spending it also means that the US government has been piling on more debt again and this trend shows no slowdown. Quite the opposite. Public debt rose another $26 billion in the last 5 working days alone.

It also contradicts the administration's philosophical line of "starving the (government) beast to death," which conservatives like to cite so often.

[pansypoo53219]

1. war

and disaster relief. yeah. the economy is gangbusters.

[IChing]

3. Just watch when the truth creeps in

The U.S. Government has just announced ...

The worst consumer-
price jump in 25 years!

Plus
The worst producer-
price jump in 31 years!

finance growth by government spending to the economic military industrial complex.

[applegrove]

2. Keynsian War.

[swag]

4. A Kick Before Dying

[IChing]

5. I put your info on market watch lbn...thanks swag

[swag]

6. V. kind.

Thanks.

[ProfessorGAC]

7. Check The Archives!

I've been telling folks that here at DU for 4 years and elsewhere for a lot longer. Deficit spending is a DIRECT fuel to the economy, and since about 30% comes back in tax revenue, the "revenues went up when taxes were cut" is a tautology as well.

There is no significant real growth of consumption in this economy, so only the 15% of GDP that represents direct gov't spending is fueling this supposed growth.

Consumers are not SPENDING MORE! I know this article suggests it, but that's not true. The combination of population growth and higher prices account for 98% of the remaining nominal growth (after the GS is deducted.)

The economy is stagnant and as long as middle class wages are going down in real terms, we will not be pulling out to stronger times very soon.
The Professor

[swag]

8. Yes, I recall you on this very topic following past GDP releases.

Muchas Gracias.