Howard Lootnick suggests the separation of government spending from GDP reports World news
US Minister of Commerce Howard Lootnick It addresses concerns about the capabilities Economic slowdown Because of the spending discounts paid by Doug Elon Musk, indicating this Government spending It should be excluded from GDP accounts (GDP).
Speaking to Fox News on Sunday, the official claimed that the governments historically had spoiled the gross domestic product.
“They count government spending as part of GDP. So I will separate these two and make it transparent.”
Such a move can significantly change how economic performance is measured in the United States.
Traditionally, government spending is included in gross domestic product accounts because tax policies, public sector employment, and state -funded projects directly affect economic activity.
The GDP report provides detailed collapses for government spending, providing transparency for economists and policy makers.
On Friday, Musk moved to the social media platform X, claiming that government spending does not add real value to the economy.
“The most accurate measure of GDP would exclude government spending,” MUSK wrote on the social media platform X.
Lootnick clarified his point of view by comparing military purchases with the infrastructure of bureaucracy. “If the government bought a tank, this is the gross domestic product,” he said. “But paying 1,000 people to think about buying a tank is not the gross domestic product. This is lost incompetence, lost money. Cut it, while it appears in the gross domestic product, we will get rid of it.”
The latest report of GDP, issued by the Ministry of Commerce last week, showed that the American economy expanded an annual rate of 2.3 percent in the last quarter of last year. The growth was largely driven by spending on consumers and an increase in federal defense expenditures. Throughout 2024, government spending increased by 2.6 percent, slightly less than the 2.8 percent economic growth rate.
Government spending also contributed significantly to personal income, which amounted to more than 24.6 trillion dollars last year. Almost five of this comes from programs such as social security, veteran military benefits, and medical care. However, government spending can also be a gross domestic contraction, as shown in 2022 when financial aid related to the epidemic ended.
Lootnick repeated that the Trump administration intends to balance the federal budget through spending discounts, on the pretext that this would help increase economic growth and reduce interest rates.
“When we balance the budget of the United States of America, interest rates will end,” he said. “This will be the best economy that anyone ever sees. Bringing against it is fool.”
