Normally I like to deal in real current dollars or constant year dollars to reduce the effect of inflation for evaluating multiyear data. However the financial folks tend to like to talk budget in terms of GDP.. So my thinking is not complete on the viability of using GDP in terms of evaluating the Federal budget, I want to start the discussion with some cited reference facts.
First some observations:
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The U.S. GDP has been changing in texture from manufacturing to services. |
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Kevin Phillips is a moderate Conservative has documented in his book the decline of mfg ( 1950 - 29.3% to 2003 - 12.7%) percentage of GDP. Also the increase of Financial Services (1950 - 10.9% to 2003 20.4 %) in terms of GDP. Page 267 Of American Theocracy - The peril and politics of radical religion, oil and borrowed money |
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Some where a finance type wanted to mitigate this by trying to define making McDonalds hamburgers as manufacturing. I think he got stopped. |
There is the claim that Tax increases hurt business / GDP. Bill Clinton raised taxes to attack the National Debt. If we remember the economy was pretty good for all in his term and is shows from government data that his constant dollar GDP had a higher average than other recent administrations.
See the calculations at the bottom of the chart
GDP comparison with Major Countries
I present this to give us some perspective of relative economies and International competition. Data for other countries can be obtained by Goggling "GDP by Country". Reports by the CIA, World Bank and the International Monetary fund come up for all countries
