Think Freely Media presents Common Sense with Paul Jacob

“Today, government at all levels consumes 37 percent of the total economy, or GDP,” Mitt Romney said earlier this month. “If Obamacare is allowed to stand, government will reach half of the American economy.”

Glenn Kessler’s Fact Checker column at the Washington Post slapped that statement with four “Pinocchios,” the worst possible condemnation for telling “whoppers.”

Yet, Kessler acknowledges Romney’s point. In 2011, local, state and federal “government expenditures amounted to 37.34 percent of the gross domestic product.” That percentage is expected to climb to just over 39 percent by 2020.

“But Romney goes way too far,” writes Kessler. Romney counts private medical expenditures, which will supposedly account for 10 percent of the projected 2020 economy. Romney’s campaign spokesperson argues Obamacare in part mandates that spending and thus the 10 percent is part of government’s “reach.”

Of course, the vast majority of all private payments for medical care — the 10 percent — would happen with or without Obamacare. So Romney’s figure does exaggerate. Still, government commandeering 37 or 39 percent of our economy seems a whopping amount.

Moreover, in making his case against including private health care spending, Kessler argues, under Romney’s notion of government reach, “a wide variety of industries, such as banking or housing, should also be counted as part of this government-controlled economy.” Well, yes. Government spending accounts for nearly 40 percent of America’s GDP. Plus, government heavily regulates and interjects itself into major parts of the private sector.

Kessler thinks Romney’s statement is a real whopper, but Romney is on to something. What’s really whopping is government’s full reach, which includes over-reach.

This is Common Sense. I’m Paul Jacob.

By: Redactor

5 Comments

  1. JFB says:

    Paul, it is not the amount, or percentage, of direct government spending which is truly at issue, it is the amount of spending which is directly or indirectly controlled or influenced by the various governmental units.
    With that reality in mind Mr. Romney is vastly underestimating the governmental reach into our lives.
    The political class, elitists and their apologists such as Mr. Kessler will always measure incursion into private lives and personal liberty as low as possible, and complain vehemently whenever the actual incursion is estimated.

  2. MoreFreedom says:

    Actually it’s worse than Jacob makes it out to be. Government spending is included in the GDP, but government produces nothing. But they do create expensive burdens on business and us. I.E., much government spending actually reduces production of real goods by creating headaches and compliance costs for businesses.

    There’s a strong case that GDP shouldn’t include government spending. I’d say that we shouldn’t count government spending as part of GDP, and subtract part of it from GDP as well.

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  5. conversational tone…

    Common Sense with Paul Jacob » Archive » The Real Whopper…

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