GDP is More than a Gross Number

From Commerce Department's Q2 GDP report (second estimate):


Real exports of goods and services decreased 5.0 percent in the second quarter, compared with a
decrease of 29.9 percent in the first. Real imports of goods and services decreased 15.1 percent,
compared with a decrease of 36.4 percent.

Real federal government consumption expenditures and gross investment increased 11.0 percent
in the second quarter, in contrast to a decrease of 4.3 percent in the first. National defense increased
13.3 percent, in contrast to a decrease of 5.1 percent. Nondefense increased 6.2 percent, in contrast to a
decrease of 2.5 percent. Real state and local government consumption expenditures and gross
investment increased 3.6 percent, in contrast to a decrease of 1.5 percent.

The first paragraph above shows that because America's imports fell faster than exports, GDP improved (that's why it is gross domestic product). The second paragraph gets to the big problem. The ongoing wars in Asia are sucking up production (and lives); this is "unhealthy" GDP. And beyond military spending, government grew while revenues to private businesses and individuals shrank.

No free lunch . . .

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