ENDORSED: Taking Government Out of GDP.

The latest Real Gross Domestic Product (GDP) release from the Bureau of Economic Analysis (BEA) shows a net decrease from Q4 2024. This net decrease “primarily reflected an increase in imports, which are a subtraction in the calculation of GDP, and a decrease in government spending…partly offset by increases in investment, consumer spending, and exports.”

The choice of phrasing can lead to some misunderstanding. Imports are subtracted from GDP as a matter of accounting, not because they hurt economic growth. Investment, consumption, and government spending already include imported goods so imports are subtracted from GDP calculations to avoid double counting.

Conversely, government spending is treated as a boon to economic growth while the cost of government spending is ignored. Government spending gets paid for through taxation, taking on debt, and/or printing money, all of which are a cost upon ordinary Americans.

It’s time our measures of economic growth reflect some hard truths: that government spending comes at a cost to our standard of living and that the economy grows despite government intervention, not because of it.

Politicians love including government spending as part of GDP because it allows them to do the most atrocious things and claim they’re “helping.”