The chart below depicts US economic growth as measured by GDP excluding government spending on a 10-year moving average basis since 1958. Note that GDP growth ex-government spending has been trending downwards since 1982, and that economic growth excluding government spending is now hitting historic lows.
[click to enlarge]
Apparently, US economic growth over the past 50 years has not been as high as standard GDP reporting suggests. For example, US GDP growth for 2003-2013 averaged a mere 3.4% after subtracting government spending. The above data suggests that the US should be prioritizing growth goals ahead of inflation and unemployment as a matter of fiscal and monetary policy under the assumption that robust economic growth can mitigate or reverse both inflation and unemployment over time.
The US is in desperate need of greater private sector growth now. The public sector should yield accordingly to private sector priorities in order to accommodate this necessary structural change in the US economy. The government cuts I envision will require a determined reassessment of both US social welfare and defense budget needs sooner rather than later.
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