U.S. Commerce Secretary Proposes Excluding Government Spending from GDP Calculations

March 3, 2025 - 07:45

In a recent interview, U.S. Commerce Secretary Howard Lutnick expressed his intention to remove government spending from the calculations of the gross domestic product (GDP). While he did not provide a timeline for when this significant change might take effect, he sought to alleviate concerns regarding a potential recession.

During his appearance on a Fox News program, Lutnick stated, "You know that governments historically have messed with GDP." His comments come amid discussions about the economic implications of the Trump administration's policies, which include tariffs on imports and aggressive measures aimed at reducing government expenditures through deep cuts and layoffs.

Lutnick's proposal has sparked debate among economists and policymakers, as the exclusion of government spending from GDP could fundamentally alter perceptions of economic health. While he dismissed fears of an impending recession, the proposal raises questions about how such a change would affect economic analysis and decision-making in the future.