States Continue to Drag Down GDP
Posted at 8:45 a.m. on Sept. 3
The Bureau of Economic Affair’s latest revision to the second quarter gross domestic product estimates show that state and local government “was still a drag on GDP in Q2,” notes Bill McBride.
“One of the reasons I expect GDP to pick up over the next few years is that state and local government spending will probably stop being a drag on GDP, and might even add a little to GDP going forward… However state and local government spending has made a negative contribution for 13 of the last 14 quarters.”
“Currently state and local government as a percent of GDP is back to 1970 levels!”