Summary

Commerce Secretary Howard Lutnick proposed separating government spending from GDP reports, claiming this would increase transparency as the Musk-led DOGE pursues spending cuts.

Economists warn this could distort a fundamental economic measure. Government spending is traditionally included in the GDP because changes in taxes, spending, deficits and regulations by the government can impact the path of overall growth.

Lutnick and Musk claim government spending doesn’t create economic value, with Musk stating, “A more accurate measure of GDP would exclude government spending.”

Critics note this downplays benefits of Social Security, infrastructure, and research.