Stiglitz on using the GDP measure.

Joe Stiglitz questions the use of GDP as a measurement tool:

"For example, while GDP is supposed to measure the value of output of goods and services, in one key sector - government - we typically have no way of doing it, so we often measure the output simply by the inputs. If government spends more - even if inefficiently - output goes up. In the last 60 years, the share of government output in GDP has increased from 21.4 percent to 38.6 percent in the U.S., from 27.6 percent to 52.7 percent in France, from 34.2 percent to 47.6 percent in the United Kingdom, and from 30.4 percent to 44 percent in Germany. So what was a relatively minor problem has now become a major one."

Why can't we measure the value of government goods and services?

From the BLS archive:

"The Federal Productivity Measurement Program produced labor productivity indexes and related statistics covering about two-thirds of the entire Federal Government. Indexes of output per employee year, output, employee years, compensation per employee year, and unit labor cost are available for fiscal years 1967 to 1994 for selected functional areas of Government. The program, which was part of the Division of Industry Productivity Studies, was terminated in 1996."

And

"The program to measure State and local government productivity, which was part of the Division of Industry Productivity Studies, conducted research on and developed labor productivity measures for State and local government services. Indexes of output per employee year, output, and employee years are available for selected periods between 1967 and 1992 for various State and local government services. This program was terminated in 1994. "

What happened to measures of government productivity?

Roals Wirtz of the fedgazette picks up the story:

"BLS found that annual productivity in the federal government grew by 1.1 percent from 1967 to 1994—not too far from the 1.4 percent annual growth of the nonfarm business sector during the same period. In fact, the two rates were identical from 1967 to 1982. But the rates diverged at this point, and from 1982 to 1994, the federal government's annual rate of productivity growth was less than half that of nonfarm businesses (0.6 percent to 1.3 percent, respectively)."

My interpretation:

Basically, the BLS quit measuring government productivity because Ronald Reagan, darling of the Conservatives was a damned communist who wasted trillions of taxpayers dollars in government expansion. As Communists always do, Reagan engaged in accounting fraud.

My bold, my quote, so sue me. It is time we purge the Republican Communist Party.