There is no doubt that the U.S. economy is in a slowdown, but it has not become a recession, according to a report released last week. That is good news, of course — but one of the “bright spots” in the report is troubling.
According to the Commerce Department, the nation’s gross domestic product grew at an annualized rate of sixth-tenths of a percent during the first quarter of this year. Because GDP is among the most important indicators, that means the economy has not entered a recession.
That’s the good news.
The bad news is that one of the “stars” of the economy during the first quarter was — you guessed it — government. Spending by government agencies increased at an annualized rate of 2 percent during the first three months of the year — more than three times the rate for the economy as a whole.
Money Americans send to Washington through various taxes could be spent in the private sector, boosting that area of the economy. And, of course, deficit spending is a drag on the economy.
Come to think of it, a “recession” of sorts, in government spending, might not be a bad thing.