Thursday, May 26, 2011

Gov't spending cuts subtract 1.0% from GDP

GDP in the first quarter of this year was reduced by more than a full percent due to a slowdown in government spending. And even with this evidence the Republicans and Obama want to reduce spending even more. That's their fantasy world of "cut and grow."

From today’s GDP report

Contributions to GDP

Personal Consumption +1.53%
Gross Private Domestic Investment +1.45%
Net Exports -0.06%
Government Spending -1.05%

More spending cuts are coming!


Crake said...

I nominate “bean counter approach”, as a more pithy and colorful description, to replace “Cut and grow” as the label for the deficit hysteria camp.

Adam2 said...

But, but, spending cuts helped private sector consumption grow by the enormous rate of 1.53% and private sector investment of a booming 1.45%.

Huge numbers there that let us grow at an annualized rate of 1.8%.


beowulf said...

Congratulations America! We've limped over the line to a $15 trillion GDP.
Current-dollar GDP -- the market value of the nation's output of goods and services -- increased
3.8 percent, or $138.9 billion, in the first quarter to a level of $15,010.3 billion.

That certainly makes the math easy, 1.0% of GDP = $150 billion.

WillORNG said...

If public sector had kept pace at 1.5%, growth would have been 4.3%.

Slash and crash?

Hank said...

Mike, would not a tax cut off set the harm of lower government spending? The private sector needs to get going here, I still do not see any focus on this with this adminstration. We are still worried about Gays in the military, lightbulbs, and green jobs. My God, save us!