By Mish follow 2013 Jan 30, 9:04am 2 links 506 views 2 comments
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Government Expenditures Plus Transfer Payments Equals 30.7% of GDP; GDP Shocking Downward Surprise; Don't Worry It's Transitory
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So? It's hovered between 30-40% since WWII.
It's pretty average by global standards:
Nearly every wealthy country on the planet can attribute 30-50% of its GDP to government (as can most poor countries).
The countries that can't are places like Burma and Guatemala (yikes!), gambling-funded countries, and countries with large government owned industries (socialist / communist) that are accounted for separately.
Want to spend less? Great. Lets have a state-owned revenue source instead. Not a fan of communism? How about massive gambling and huge gambling taxes to go with it? Still no? How about...being a third-world shithole like Guatemala?
Mish's bottom line:
"Always remember: Government spending and government giveaways (regardless of how stupid or unproductive) add to nominal GDP, by definition. "
Do me a favor Mish. Check out Increases in government spending under Reagan, and their impact on GDP.
Of course Reagan was President at the perfect time. Inflation winding down. Interest rates dropping fast from the stratosphere. He was in the catbird seat. It would have been really hard to fuck that up.