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“Davidson” submits:

Real GDP continues to outpace the underlying Real Private GDP. Government Exp&Inv has grown 4.08% annually since July 2022 while the underlying economy has grown at a 2.78% pace.  This has given the Real GDP an inflated pace of 2.98%. Note: I use a simple calculation of annual rate of change over the period July 2022-Oct 2024 whereas the Fed has an inflation adjusted calculation.

The charts show two views of Real GDP vs Real Private GDP which is calculated: US Real GDP – Total Govt Exp&Inv = Real Private GDP.

Note that when govt. spending was ‘sequestered’ from Oct 2009-Jan 2014, Real Priv GDP outperformed Real GDP by a decent margin. We held that more or less till after the COVID lockdowns as govt. spending remained in check. This changed July 2022 as govt. spending exploded and resulted in Real Private GDP falling well below prior levels and even below the reported Real GDP.

This data makes a clear case for limiting govt. spending by my analysis.

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