Taking Government Out of GDP, An Update

Government and Economic Growth

Modern macroeconomic theory claims that government spending, taxation, and monetary creation is essential for economic growth. Austrian Economists, however, note that government stifles the economy.

Taking Government Out of GDP, An Update

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 a…