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Government Spending Boosting GDP

 

“Davidson” submits:

Real GDP rises with increase in Govt Exp&Inv, but Real Private GDP not perceptibly changed. The Real Private GDP has been ~3% March 2009-July 2018. Real Private GDP is the true measure of economic activity and Govt Exp&Inv does not have a long-term impact, but does cause Real GDP to rise with rises in Govt Exp&Inv and to fall with declines in Gov Exp&Inv. By using Real GDP as the measure of economic activity, the consensus is now mistakenly seeing a rise in economic activity when in fact it is mostly decent but unchanged. Govt Exp&Inv helps to drive market psychology higher and equity prices higher when there is no long-term lasting economic benefit.