Shrinking GDP and Big Government Failure

After three years of inadequate growth the economy contracted during the final months of 2012. GDP turned negative by 0.1% during the fourth quarter.

After the Commerce Department issued it’s quarterly GDP report the White House tried to present a deteriorating economic indicator in positive terms:

This was the first quarterly drop in real GDP in three-and-a-half years. Over the last fourteen quarters, the economy has expanded by 7.5 percent overall[…]  During the four quarters of 2012, real GDP grew by 1.5 percent, the third consecutive year of economic expansion.  Over this period, real GDP growth has been led by an expansion in the private sector.

This chart provides context for the numbers cited by the White House.The White House hopes it’s statistics will seem impressive to people who don’t have the time or inclination to study the data on their own.  But as the chart shows we’re suffering through the worst post-recession economy ever recorded.  The chart tracks each post-recession period the same way the White House measures the current economy, beginning at the first quarter of positive growth.

For more than three years the President and his media supporters have told us that the end of the recession proves his policies of massively expanded government borrowing, spending and regulatory control over the economy “worked.”  But there has never been a recession that didn’t end, no matter what the government did or didn’t do.  And in fact, this current post-recession recovery is the weakest ever recorded since the government began tracking quarterly GDP growth in 1946

The chart below shows spending increases during each of the ten recessions that came before the post-recession periods tracked in the chart above.  While this data alone doesn’t conclusively prove excessive spending is holding back the current recovery it clearly debunks the notion that the recession could not have ended without his tsunami of new spending.

The White House message says “GDP growth has been led by an expansion in the private sector.”  But the private sector always leads GDP growth.  Without a productive private sector to tax there can be no government at all.

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