I have a question. spending as a percentage of GDP is used by politicians to described the amount of GDP CONSUMED by the government. However, If C+I+G=Y in the keynesian model they seem to love, , then is it not a logical fallacy to say talk about spending levels in terms of G/(C+I+G) because you ar…

And what happens when government spending > GDP?

It’s a good question. A very good one.

You should realize that the ‘G’ number in GDP (although what you’re using is GNP) does not include transfer payments (welfare, SS, etc.). That is, it doesn’t include the money they just dole out without getting anything in return (except for subservience). That would cause some severe double countin…

And what happens when government spending > GDP? Well by definition, if GDP = Consumption + Investment + Government Spending, then I suppose it can never be.

First off, to say a line of reasoning is logically fallacious implies that an assertion is being made. What assertion is being made here? What is “Government spending as a percentage of GDP” given that GDP = C + I + G + (X - M)? If you can’t figure that out, I weep for the state of public education …

Oh please piss off you tedious pedant. The point he is making is that the use of this measure, as a sign of the state’s fiscal health, may be misleading. He might have used the term ‘logical fallacy’ incorrectly, but the meaning of his question was fairly clear. I bet you’re the sort that corrects p…

I had noticed that too (probably many have). I think that if you cut out G, the percent becomes something like 60%.

G is only 19.5% of GDP at the present time. It’s not as high as the commonly cited measures for Gov./GDP for the reason I mentioned above (transfer payments). In Q1 of 2012, GDP was $15,454.0 billion. Government consumption expenditures and gross investment was $3,018.2 billion, with $808.3 billion…

government spending as a percentage of GDP?

Economics Economics Questions

John_James May 31, 2012, 4:54pm 10

This may help.

(not that it necessarily gives a direct answer (it may, I don’t remember for sure) but it may help)

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government spending as a percentage of GDP?

This may help.

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