GDP grew by two percent in the third quarter of this year. That’s not a particularly impressive number, but in this economy — with its now-ubiquitous diminished expectations — it falls under the category of “We’ll take what we can get.” The Mercatus Institute’s Veronique De Rugy and Keith Hall have scratched beneath the surface of those numbers, however, and what they’ve found is even more disheartening than the rate itself:
According to the Bureau of Economic Analysis, the economy grew by a modest 2 percent in the third quarter of 2012. While this was stronger growth than the preceding quarter, all of the increase in GDP growth came from the biggest increase in federal government spending in over two years. Federal government spending rose 9.6% at an annual rate in the third quarter…Growth in the private sector fell by 0.1 percent to 1.3 percent in the third quarter—down from 1.4 percent in the second quarter.
But the private sector, we remind you, “is doing just fine.”
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