GDP Growing Slower Than I Thought

U.S. Bureau of Economic Analysis (BEA)

I haven't been paying much attention to GDP growth lately. It seems to be growing a great deal slower than I thought. A friend of mine asks me to comment on the unemployment rate from time to time. Unemployment is often seen as a lagging indicator. However, with growth this slow it seems unlikely that the employment situation will improve any time soon.

I'm tempted to think that this is because the government is spending money at a record rate. What we see is an increase in government spending at the federal level that is partially offset by decreases in spending at the state and local level. This table might be somewhat misleading, since it is for purposes of calculating GDP and hence excludes transfer payments.

The government spent record amounts of money in the previous administration, and the economy didn't do well. Now this President is doing the same thing but because he is supposed to have a different political ideology we don't see his policies as a continuation. The economy did reasonably well back when Bill Clinton was in the White House, which was when the government actually reduced spending.

We see that spending by the federal government doesn't stimulate the economy. What it does is crowd out spending by state and local governments as well as the private sector.

Or at least that's how it seems to me. Perhaps there are other interpretations of the data.