Our economic betters speak their wisdom:
Commerce Secretary Howard Lutnick said Sunday that government spending could be separated from gross domestic product reports in response to questions about whether the spending cuts pushed by Elon Musk’s Department of Government Efficiency could possibly cause an economic downturn.
“You know, that governments historically have messed with GDP,” Lutnick said on Fox News Channel’s “Sunday Morning Futures.” “They count government spending as part of GDP. So I’m going to separate those two and make it transparent.”
I suppose Lutnick, whose own Commerce Department calculates GDP every quarter, doesn't realize they already separate these figures every quarter too. For the federal share of GDP, it's line 51 in Table 3. There's no need for Lutnick to do anything more than hop over to FRED and look it up:
But what does this get you? Lutnick apparently doesn't understand that GDP is GDP no matter where it comes from. He can separate the federal share all he wants, but government activity still counts as activity whether he likes it or not. If you cut it back, GDP really does go down, just the same as if Walmart sales decreased. Reality remains unchanged no matter how hard you try to play games with it.
Reminds me of the stimulus debate amid the Great Recession: "Government can create work," they said, "but it never creates jobs."
The paychecks sure seem real.
How do they believe this stuff when they also believe government spending is the only cause of inflation?
Tax cuts pay for themselves, right?
Hasn't worked in the 75 years I've been alive. Guess I just need to hang on a little longer!
People have short memories. The "serious" ones did this last go 'round.
He wants to argue about stupid shit like this instead of what they're doing, or what the economy's doing. Don't chase the squirrel.
Nothing like a government run by the "Worst and the Dumbest" straight, white males. Lutnick apparently doesn't understand that government spending ends up being somebodies income and some of that in turn becomes other peoples income and/or investment. Aside from that government spending per se simply doesn't matter. What matters is government corruption, which the Trump administration has gone all in on and, yes, government efficiency, which DOGE has made a complete hash of by equating head count with efficiency, and government crowding out private investment by running deficits during a time of full employment. Here again, the GOP has gone all in on deficit financed tax cuts for the wealthy. This is not going to end well, but I have no idea how one protects themselves from fantastic ignorance and corruption.
Ron Filipkowski recently made a remark like, "Everything goes back to Lutnick. We gotta watch this guy."
It's not like the government buys stuff from private companies, or gov't workers pay mortgages or buy groceries!
Worst Boss ever and in the world in Wall St that is full pieces of pure dung, none is more so then Howiie the Doosh.
Lutnick seems to be a complete ignoramus.
Countries will just stop exporting to the US as much as they can so this revenues will not be nearly as big as these idiots expect. And these countries will slap tariffs on UA exports so the US trade deficit will increase.
Plus the IRS collects more than $5 trillion from all sorts of taxes, not just the $700 billion in personal income tax Lutnick is referring to.
It's not that other countries will stop exporting, it's that the US will stop importing because the tariffs have pushed prices up so much that the goods can no longer be sold, or at least a lot less of them can be sold.
Maybe "there goes our deficit", but that extra $700 B would be on top of the 4 billion in direct taxes that he proposes to eliminate.
Dude is arithmetic-challenged.
+1
“His goal is to abolish the Internal Revenue Service and let all the outsiders pay,” Did he go to Trump University? In what reality would a foreign corporation or manufacturer pay a tarrif? Apparently Trumps stupidity is contagious. That or he surrounds himself with people more stupid than himself.
Hard to believe they are more stupid. Though with Tuberville it may be a tie.
Acvording to that NYPost article, Trump also wants to massively raise taxes on cruise ships. That should go over really well with the MAGA oldsters.
Oh boy. It's not only old people who like cruises. People with young kids do too. You get free all you can eat meals literally 24/7. I'm not sure how much of a value cruises are but that alone makes it appealing.
I've posted this before. The US imports about $3 trillion worth of goods per year. That $700 billion Lutnick is talking about fits pretty well with 25% tariffs on everything from everywhere, if you make the entirely unjustified assumption that the tariffs will not cause a fall in the value of imports. In 2023, the IRS collected about $2.6 trillion in income taxes. To replace that with tariffs would mean tariffs at 90% on all imports, again assuming that imports would not decline as a result of the tariffs. I don't believe that it's possible to get more revenue from tariffs than about one-third of the present income tax revenue. Trying to replace the income tax with tariffs will cause horrifying inflation, without getting rid of income tax.
" Reality remains unchanged no matter how hard you try to play games with it."
Kelly Anne Conway was a trend setter. Alternate facts are morphing into alternate reality.
Anything for Azathoth.
This is beyond stupid. Who cares about the absolute value of GDP? It's the percent change that matters. Make a similar plot with "change from a year ago". They'll be almost identical.
The goal is to pretend we’re not in a recession and Trump drove us there.
I sure don't see how this is going to do it. Especially given this:
https://fred.stlouisfed.org/graph/?g=1E7vI
!1
+2
Well, can GDP actually be "negative"? So why is he yammering "absolute values" anyway?
Fun story here about Kevin Hassett, director of the National Economic Council, and his belief in comics books as investments: https://www.thebulwark.com/p/meet-kevin-hassett-conservatisms
lol. Why not Beanie Babies or Hummel figurines?
It doesn't matter what the government currently publishes, that's not the story here.
The key is that the Trump admin just told us that they intend to create new GDP stats with the express effort of manipulating the data. Lutnick tells us this using the established formula that will allow the media to report in this topic in a way that keeps the focus on a he said/ she said or both-sides narrative.
Kevin's charts for example will be evidence that past bureaucrats and/or DEMOCRATS! have done exactly what the transparency focusedTrump officials have accused them of. Just look at those funny looking manipulated charts!
Future data will be unreliable and we will chase our tail trying to prove that it's hard to say what the truth is, maybe Trump has a good point after all?! We will spend great time and effort muddying the waters to avoid making it clear that Trump is telling us that he intends to manipulate the official data.
"and make it transparent.” As transparent as a brick wall.
Given conservative dogma, what I think he was trying to say, (despite his terrible ability to communicate) was that, (a) since federal spending "crowds out private spending", (b) it cannot possibly contribute to GDP without a penalty, (c) therefore it should be separated out and not be counted, (d) and when we do so, it will show that big fat tax cuts will boost the economy.
This, mind you, despite decades of research showing that tax cuts have the lowest fiscal multipliers of all stimulus activity, and is especially harmful when done in the middle of a recession. Put another way, if conservatives really believe tax cuts and smaller government are the ways out of recessions, let them FAFO in response to the one they've already managed to initiate.
Double Bonus: The Convicted Felon accelerates Lunatic's belief that tariffs can replace a loss in personal income tax receipts.
Triple Bonus: With his unitary executive powers he fires the Feds and installs people who will slash the Fed Bank rate to zero.
Let's get ready to rumble with stupid people!