Comparing anything to GDP is the Washington equivalent of Enron accounting.

GDP includes federal spending.

In 2008 transfer payments accounted for 45% of federal spending. Transfer payments are redistribution of wealth - things like Social Security, welfare, unemployment, and disability payments. Including government spending as part of GDP results in an artificially high number that is not reflective of true GDP.

Government does not engage in productive activity. Government collects taxes or incurs debt that would otherwise be used by the productive sector of the economy to produce wealth.

The higher the percentage of government spending as a share of GDP, the less useful this number becomes. Any ratio derived from it becomes even less useful.

And the last time I checked, government spending is in the stratosphere.

GDP as we know it today is not useful information.

- K Smith

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