03-05-2025, 04:16 AM
numbered wrote:
The Commerce Secretary, Lutnick, was discussing the changes they want to make to economic statistics...his latest is that government should not count. wtf.
The WTF:
https://www.marketplace.org/2025/03/03/w...-from-gdp/
“I laugh because it would be something insane to do,” said Gian Luca Clementi, professor of economics at New York University.
Government spending is a key component of GDP for countries across the globe, said Lorenzoni. “These are, like, internationally agreed accounting standards” set by the International Monetary Fund, “something that, you know, goes back 80 years or more.”
Eighty-plus years of standards that help us measure international economies against one another, and our economy against itself over time. Government spending is a part of that because it is a substantial chunk of the U.S. economy.
“So it’s everything from buying pencils to paying federal salaries to building tanks,” said Wendy Edelberg.
She said untangling those federal transactions from GDP doesn’t make sense because they are inherently tangled up with private businesses and consumers. And though measuring the dollar value of a product like a tank is easier than measuring the value of, say, a federal worker analyzing the need for a tank, those kinds of services are relevant.
“For sure you want to think about what federal spending is doing to demand,” said Edelberg, along with whether the economy can meet that demand and how prices react.
Besides the element of accurately measuring the economy, there’s the element of trust. Withholding tried and true data is a tactic by governments like China or Argentina, Clementi said. “Countries from the developing world where routinely they do these types of things” — fudging the numbers to make the economy appear better than it is.