Fox GDP Segment Hides How Decreased Government Spending Hurts Economic Growth

Blog ››› ››› ALBERT KLEINE

Fox News glossed over an important aspect in its reporting on lower than expected GDP growth -- the government contribution to GDP has been negative in the majority of recent reports.

Following the April 26 release of first quarter GDP growth estimates, Fox Business anchor Stuart Varney dismissed the 2.5 percent increase as "not good numbers," claiming that the increase was not indicative of a robust recovery. From Fox News' America's Newsroom:

Varney provided a laundry list of reasons why GDP growth has failed to live up to expectations, including recent federal and state tax increases and, notably, cuts from sequestration - a reversal from previous right-wing assertions that sequestration was too small to harm the economy.  Varney failed to explain, however, that too little government spending has been holding back economic growth, as indicated by many of quarterly reports from the past two years.

The Bureau of Economic Analysis provides data on individual contributions to GDP, including government spending's contribution. When the government's contribution to GDP growth is separated from total growth, it becomes apparent that it has been a drag on the economy for much of the past two years.


In the previous 13 quarters, government spending has only added to GDP growth twice - once in the second quarter of 2010, and again in the third quarter of 2012.

This observation has been recognized by others, causing The Washington Post's Ezra Klein to boldly state that "government is hurting the economy - by spending too little." Of course, any recognition of this fact from Fox News would require the network to abandon its longtime stance that increased government spending can only hurt the economy.

Posted In
Economy, Budget, Taxes
Fox News Channel
Stuart Varney
America's Newsroom
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