Dear friends,
It seems to me, for a myriad of reasons, government spending should be subtracted from any GDP calculation. Because every penny of government spending, be it from taxes, borrowing or printing, comes out of the pockets of someone else. Therefore, government spending doesn’t add to the cumulative output, it subtracts from it. So, by adding a subtraction to the sum, you get a wildly skewed number. One that benefits the elite, by rationalizing their profligate spending… as an addition to Gross Domestic Product. A pure con. Nevertheless, in every calculation of GDP, government spending is at the top of the list. Which makes me believe that economists don’t want the real numbers known. Making GDP and all the numbers derived from it… swindles.
Gross Domestic Product, or GDP, is a calculation of the total output of a nation’s economy. It’s done by adding up adding spending by government, investment by government, spending in the private sector, investment in the private sector, and exports, minus imports to equal GDP. The figure is used to determine if the economy is growing or contracting, the rate of growth, as well as many other economic calculations. Those then inform public policy if its on the right of wrong track… judged by economic growth, as measured by GDP. If that number is skewed somehow, then all those subsequent calculations are also skewed. Being based on wrong data. So, you can see that by adding something that should be subtracted, creates a cascading effect.
There are assets and liabilities. A liability is something that costs you to own it, and returns a marginal profit at sale, or even loses money. Like a car. An asset is something that pays you to own it… like a rental unit. Which shows calling any government spending an investment is a lie. Bureaucracies don’t buy assets, they buy liabilities… call them “assets,” and sell them for pennies on the dollar. Making any talk of government investment absurd. A million dollar vehicle sells for a grand at government auction. In reality, government never invests in assets, it only buys liabilities. Calling a liability an asset is a sure way to poverty. Unless you have unlimited funds. Like government. Nevertheless, adding government investment to GDP, is adding something that should be subtracted.
Government spending doesn’t add to GDP, as the expert class would like you to think… it subtracts from it. Because all those highly paid bureaucrat’s are paid out of someone else pockets. They don’t produce anything anyone wants. What the deep state produces is friction to the economy and burdens to the people. At cost to the victims. Their pay doesn’t come from profits, it comes from taxes, money printing and borrowing… all of which subtracts from the money available for the real economy to spend and invest. While the negative effects of taxes are pretty obvious, the effects of borrowing and printing are less obvious, though more destructive, because of it. They’re manifested by inflation. Making both the spending itself a subtraction, and government’s output, an unaccounted for subtraction.
By adding that which should be subtracted, (government spending and investment), the elite are conning us. That scam is premised on the notion that the roof can support the floor. Take two economies. One is 100% private sector spending, investment, import and export, while the other is 100% government spending, import and export. Which economy do you think would provide the most prosperity, safety, liberty and least wars? North Korea Versus Singapore for example. By adding a subtraction, government spending is rationalized. Even as it diminishes instead of increases the national output. An honest economist would come out with GDP figures that subtract government spending from output, instead of adding it… so we can see the truth. The truth will set you free.
Sincerely,
John Pepin
