I would like to begin a discussion of what the REAL GDP of the US is. i.e. what is the US’s true (estimated) gross product.
We know that GDP is incorrectly tabulated and massaged. We also know that the Fed’s printing of money inflates things; especially as this lucre sloshes around Wall Street. I read somewhere in the past year or two an article that estimated that US GDP was inflated by a much as 60%.
I do not want to discuss whether one should or could accurately track GDP, I just want intelligent discussion and feedback on what the US’s real GDP may be.
I seem to remember Rothbard offering an alternate scheme, PPR, or Private Product Remaining.
It’s in the Appendix of his book, America’s Great Depression. Here is Tom Woods summing it up:
In
place of GDP figures, Rothbard proposed instead what he called private product
remaining (PPR), which he arrived at by first "deducting ‘product’ or ‘income’
originating in government and ‘government enterprise’-i.e., the payment of
government salaries-fromGross National Product." This figure is the Gross Private
Product, from which Rothbard then deducted the resources that government activity
drained from the private sector-namely the larger of either government expendi-
tures or receipts-to get the private product remaining in private hands, or PPR
(Rothbard 1983, pp. 296-97). [page 339 in the edition available here free as a pdf]
Would the government spending numbers include transfer payments, or just the spending included in GDP? And don’t Rothbard’s statistics assume government spending is 100% inefficient? That seems a little far-fetched.
“And don’t Rothbard’s statistics assume government spending is 100% inefficient? That seems a little far-fetched.”
Some things the government provides are useful, if not inefficient (and could be done by the private sector better), like roads (though I should add that even some roads built by the government are next to useless). Other things like National Defense in the case of the US, may actually be disservices since we are arguably made less safe by intervening in other countries’ affairs. So on net, it’s possible that the government provides absolutely nothing. This is of course assuming you can measure all this in any meaningful way, which I highly doubt.
I don’t know Rothbard’s exact reasoning on the issue though. These are just my thoughts.
I have been looking for data on the PPR and GPR but I haven’t really been able to find quite what I am looking for. The closest thing has been http://mises.org/journals/rae/pdf/rae1_1_10.pdf.
In your search, have you found anything out there with more recent numbers? Anything out there with pre-1947 figures?