It’s the PRIVATE Economy That Matters

The report is made public by McClellan... Must read to have basic understanding of the way an economy operates.   

 There was a saying that became popular among politicians and others during the Clinton presidency, reminding people to focus on the economy as the important task.  We’ll spare you that saying, and the negative epithet it contains, since you probably remember it. 

    That saying almost had it right. The economy does matter, even if all you are trying to do is get reelected.  But what they did not realize then, and what many do not realize now, is that it is the private economy which really matters. 

    If you remember your macroeconomics class, you recall that GDP is the sum of several data points in this formula:

        GDP = C + I + G + (X-M)

    In English, that’s Consumption plus Investment plus Government spending, plus eXports minus iMports.  The Bureau of Economic Analysis reports data on each of those components as well as on overall GDP.  We had never seen a good analysis done about private GDP, so we decided to do one ourselves. 

    Here is a chart compares the total nominal GDP to private GDP, taking out government expenditures.  The gap between the two lines represents the size of government spending at all levels, federal, state, and local.  It is easy to see that this gap is getting bigger.

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