'Craig McLean, acting chief scientist of NOAA, testified before Congress that “NOAA is a $12 billion agency trapped in a $5-and-a-half billion budget.”'
Most of us rarely have all the funding we'd like. This is where we expect innovation and creative thinking to come into play...and sometimes a radical rethinking of our mission and its scope.
as far back as we know, even the public beer production in BC Mesopotamia, markets and governments have both performed economic activity, and likely it is not possible for one to operate without the other. today broadly, the West is stunned by the newness and rapidity of technology application, the resulting incapacity of public sector institutions to manage the impacts, and the central problem of obsolescence of the skills, markets and infrastructure of the majority of the population. in a more favorable situation china has developed competent state institutions that interact with finance markets and production markets, manage commercial environments, develop key inputs and infrastructure, and coordinate these levers toward strategic goals such as automation, employment, trade, and developing foreign supply chain infrastructure. it has avoided the creative destruction impact that is chonic in the West. the US has critical technology inputs developed by DARPA, NIH, and NSF that have largely propelled its economy since WWII. This activity is a small slice of the economic coordination role of institutions in China.
nearly all the useful economic activity of the government in US can be done more efficiently, as Twitter could keep network and algorithms running with a fraction of its employees. DOGE will help, and we'll quickly recover any missing babies, but there is a more important service from DOGE - knee capping virtue-empathic paradigms growing in govt and NGO bureaus that champion such retrogression as intermittent energy, destabilizing governments and escalating separatist wars, and eliciting victims in our streets and schools.
what DOGE is likely blind to is the need to develop competent institutions to strategize, coordinate and increase markets. tariff and immigration shenanigans may convince some that the government is fighting for us, but the underlying obsolescence won't be changed without increase of state capacity. our intellectual resources being wasted on imagining grievances are desperately needed to build modern state institutions
I don’t dispute your commentary here, Dr. Pielke but the same ‘thinking’ about a tank also produced the Littoral Combat Ship, which was a disaster when we should have just built more destroyers. I think the Pentagon and many other government agencies tend to over think then get bad political advice/direction. Also, very efficient companies are forced to make cuts and live within budgets that often shrink all the time. Government budgets almost never do and rarely lose people. Being ‘understaffed’ is a normal function of nearly every organization. Government tends to whine about it more. I also think NWS will or can benefit by system upgrades and AI support. If anything can help analyze weather trends, models, and data quickly and efficiently it almost has to be AI. And that will likely cut government staff, IMO. None of this is easy, of course, and I still enjoy your columns and fair, deliberate analysis.
Roger - this is an outstandingly inadequate analysis. You set up a strawman - "Lutnick says we don't need people who think about xxx," and then proceed to show how silly it is. And you're correct, the assertion you make is silly. What Lutnick said is we don't need 1000 people thinking about xxx. And he's right. They're hedgehog technocrats who get in each other's way. They pile on unnecessary requirements sometimes leading to a $700 hammer. They increase the probability of groupthink. Bottom line - yes, we need people to think about xxx, but we have too damn many doing it right now.
A trivial example. Several years ago I tried to count the number of federal programs purporting to increase STEM proficiency. I stopped when I got over fifty in just seven departments. And, oh by the way, have you noticed that our kids are less proficient in STEM than they were in the last century? In some of our largest cities' school districts, there are NO - 0 - nada - eightgraders who are proficient in 8th grade math.
If you want to criticize the President's approach to paring (taking an ax to?) the federal bureaucracies, then please choose better ground. That ground is certainly there. There doesn't seem to be any semblance of a coherent plan. There are likely to be long-term impacts of cutting those who will become the next cohort of middle managers (primarily). Some important new initiatives will be delayed or abandoned.
However, also please recognize that whether you care for him or not, at least someone is finally starting to try to fill in our debt abyss. Our government is now paying more to service that debt than it is for our nation's defense. Important thinkers like Neil Howe (historian), George Friedman (geopolitical scientist), William White (economist), and Peter Turchin all predict a huge crisis in the next ten years, each looking only through their own lens. If our debt is not pared down, it could precipitate that crisis. Even if it didn't directly lead to crisis, the debt would limit our options to meet the challenges the crisis may pose.
I was very disappointed by this article as well. Roger usually doesn't go down the strawman path very often, but he completely ignores the very real and massive issues that exist with government spending that were ignored by past administrations. One critical insight that has emerged is how the federal government is (and has been) absolutely horrendous at just keeping track of its own spending. If you can't even do that, it's guaranteed that there will be plenty of funds poorly spent. The other elephant in the room is that the federal govt. has zero incentives to increase productivity. For example, you have "use it or lose it" budgeting practices which ensures that no rational manager would try to be economical with their spending. Why would they do that and cut their own budgets for future years? Given these conditions, it's inevitable that there will be plenty of waste in the system. I'm not sure it'll be significant enough to make a dent in the deficit, though, given the size of that gap. But that doesn't mean that this still isn't a worthwhile exercise.
Very good comment. I think government agencies and employees need to be evaluated on their added value. Do they increase value in their area, or decrease it? The Department of Education clearly decreases value, because since it was founded students have learned less, this is easy. What parts of NOAA and USAID add value? What parts decrease value? These are key questions and a little more complicated that the Department of Education.
Thanks John, I appreciate your critique, both its substance and tone.
Let's start with a big point of agreement. Yes, debt is a big problem.
And it should be dealt with.
But the focus on NOAA and AID is not going to make a dent in the debt, regardless how any of use think of these agencies.
I also agree with this:
"There doesn't seem to be any semblance of a coherent plan. There are likely to be long-term impacts of cutting those who will become the next cohort of middle managers (primarily). Some important new initiatives will be delayed or abandoned."
One point of disagreement, I'm pretty sure we need on order of 1000 people thinking about tanks and probably more than 2500 meteorologists!
Focus on NOAA and US AID? Sorry, but every department has already felt some impact, with more to come. US AID is so Feb, NOAA may be March and we don't even know who's next. Bottom line is - reduce the head count, and you reduce the total cost to the taxpayers even more. And beyond the initial disruption we may actually get better decisions implemented sooner. Our federal government seems hellbent on providing continual proof of Pournelle's Iron Law of Bureaucracy.
As for tanks - don't see a need for more than a good balanced team of < 10. More than that you get the equivalent of a pier that can't stay afloat.
However, I hope we can agree that we won't have any permanent solution unless/until we can keep Congress and the lobbyists away from each other.
All government departments and agencies will eventually become bloated and inefficient because there is no reason for them not to. Unlike the private sector, where bankruptcy awaits those who allow their expenses to exceed their income, the public sector has no such constraints. And since it is usually to the personal benefit of managers in public sector entities to expand the number of their subordinates, public sector entities will almost without exception increase in size unless they are pruned at regular intervals.
This is nothing new, of course. Charles Dickens wrote about it in Little Dorrit in the mid-19th century. C. Northcote Parkinson wrote about it in his 1957 book Parkinson’s Law, from which comes Parkinson’s law itself: work expands so as to fill the time available for its completion. (Perhaps nowadays one should say ‘time and resources’ rather than just ‘time’.)
Since all public sector entities tend to increase in size and related budget regardless of the actual outcome, DOGE is a necessary part of the pruning process. Just don’t make it a permanent organization or it too will eventually become bloated and inefficient.
You just brought back thoughts of my initial introduction to National Accounting Frameworks from 50+ years ago at the home of Keynesian Economics.
We are going through our local annual town budget process now. We are faced with very severe shortfalls of revenue compared to spending on schools, roads, public safety, etc. Just as with your Tank Example, most existing spending generates some real benefits. The problem is that higher taxes have real consequences and negative benefits for taxpayers. Balancing both sides of the ledger is difficult and painful for all concerned. For me, the current DOGE process has pointed out many areas where past choices were highly questionable or made by default. Unfortunately, it does appear that a tank is being used to identify the waste rather than a scalpel - but then, little would change if the incumbents were asked to identify the waste or terminate their own jobs.
Wow! The number of people doing essentially the same job is astounding. Do 2500 scientists studying the weather do any better than 250 scientists studying the weather? I don't know but it sure seems that the benefit is likely to be minimal and the cost is multiples higher. In the Federal agency in which I spent my career (35 years) we went from 60 in my office down to about 20 but our job description and duties changed very little. We still got the job done. In my opinion, nothing was lost although employee complaints increased about how much more work we were doing. When the head count was cut to 12 we still got the job done. The one thing that I noticed during all of this is that the quality of staff increased substantially. Essentially, we got rid of a lot of dead weight. The dead weight is not something I want to pay for and I believe most of the country would agree with me.
Please accept a comment from an Australian experienced in interactions between industry and government "agencies" (to use a short word to summarise), interactions plausibly similar in your country and mine.
I read with consternation the dollar amounts and the scale of corruption revealed in DOGE reports over the last month or so. Time will tell if they are accurate. For now, they cast an imperative over all agencies to demonstrate that they do not deserve remediation. Consider the FBI in the period starting with the Hunter laptop, the Russian collusion papers, the role of the FBI in the January 6 2021 gathering, the Jeffrey Epstein alleged suicide in an anti-suicide cell and the FBI slow release of Epstein papers demanded by DOGE, and possibly more. There is enough prima facie information to lead to a plausible conclusion of significant wikedness.
You have shown a short case for NOAA to be treated lightly, but you have not provided much evidence of absence of wikedness FBI style. Is this not a little unbalanced? Geoff Sherrington
Wow, I have not yet viewed a comment that references the most basic fact about government spending. To this discussion, whether or not any government spending is valuable or not is completely irrelevant. The one relevant fact is that by definition government spending subtracts from the economy. Why? Because the government has no money. It is funded by taxes paid for with money generated from private sector economic activity. Counting salaries paid to government workers as economic activity would be double counting, because all of that money was already paid to someone else prior to it being paid in taxes.
The USAF gives as the reason for retiring the F22 is that they are too expensive to maintain, and the the NGAD is supposed to have all sorts of new stuff. The question is whether or not that is the best use of our defense dollars. AF brass will always say yes. In fact, all three branches of service are pushing for new toys. The Defense Industry is right behind them, and they probably have more influence than the Pentagon Brass. Stopping weapons production would cause massive unemployment, and the Defence industry put plants in every state to make sure the politicians understood that. It is exactly what President Eisenhower warned us about many years ago. It worked in the past, but the gigantic budget deficit has created a new situation.
What is missing is that government is a political entity and much of what it does is because a high ranking Senator/House member said they would support a bill if they got a piece of the pie. So while the blunt may be working now, it will stop working when voters are losing jobs. Military contractors have offices in 50 states to ensure that their projects continue to grow and get legislative support. The cuts so far - pretty easy going after agencies that are not well know n outside of Washington. But when the impact hits the broader community the cuts will slow down. It is why Congress cant pass a budget. No one wants to give up their pork.
If the people thinking about tanks and planes and ships give the public competent product, there will be very little complaint. However, when those thinking people deliver abominations like the Littoral Combat Ships and the $324 million movable pier that collapsed in Gaza because the waves were too big for it to handle, with no accountability, it is unrealistic not to expect howls of rage from the plebs extorted of their wealth to pay for such folly. Especially with income tax due in coming weeks.
Interesting article. But you are misrepresenting what Lutnick said. He indicated he was going to pull out the government portion out of the GDP estimate (based on what he said in an interview yesterday). This gives a clearer estimate of the growth (or not) of the private sector. Yes, the administration’s changes will impact the governments input and output. But I think it will be more accurate to represent them separately.
In the article you attribute the decrease of GDP to the Atlanta Fed forecast is not quite correct. It was based on an unadjusted model, GDPNow. “GDPNow is not an official forecast of the Atlanta Fed. Rather, it is best viewed as a running estimate of real GDP growth based on available economic data for the current measured quarter. There are no subjective adjustments made to GDPNow—the estimate is based solely on the mathematical results of the model”. The actual forecast will come later.
Your argument on the comment regarding thinking about tanks extrapolates far beyond what the comment said. You talk about the War College, DARPA and the Defense Intelligence Agency, technological innovations, etc.. It was interesting information, but not really relevant. By mentioning these, you imply all these things might happen, when all he said was a comment about thinking about tanks.
This sets an interesting precedent. If Lutnick justifies exclusion of government spending on grounds of "x is not GDP. That is wasted inefficiency, wasted money” then could we also begin to see other things cut from GDP, such as many things that would come under the classification of rentseeking activity, excess interest, a lot of other phony economic activity (finance, insurance real estate -FIRE- excesses)? Also, do you know if the Bureau of Economic Analysis already parses out FIRE activity vs. industrial production? What lines in the report would that be on or is it all hopelessly bundled?
I'm told by those who make a distinction between industrial capitalism & fiscal capitalism that US has a greater portion of FIRE GDP to industry than, for example, China, and so the GDP numbers are misleading indicators of economic robustness. It would be nice to have some simple line items to show the proportion of industrial productivity vs. rentseeking. Why just cut the fat from Government, why not from the whole economy? If only we all understood it better and were in a better position to negotiate.
Also, would be interesting to see how the "tax" from all that rentseeking activity compares to government tax as a portion of GDP. I don't think people keep track of how much they spend away on rents & interest embedded all along the supply chain of our lives.
'Craig McLean, acting chief scientist of NOAA, testified before Congress that “NOAA is a $12 billion agency trapped in a $5-and-a-half billion budget.”'
Most of us rarely have all the funding we'd like. This is where we expect innovation and creative thinking to come into play...and sometimes a radical rethinking of our mission and its scope.
As a former tanker in the US Army, I enjoyed this post!
Thank you!! 👍💪🇺🇸
as far back as we know, even the public beer production in BC Mesopotamia, markets and governments have both performed economic activity, and likely it is not possible for one to operate without the other. today broadly, the West is stunned by the newness and rapidity of technology application, the resulting incapacity of public sector institutions to manage the impacts, and the central problem of obsolescence of the skills, markets and infrastructure of the majority of the population. in a more favorable situation china has developed competent state institutions that interact with finance markets and production markets, manage commercial environments, develop key inputs and infrastructure, and coordinate these levers toward strategic goals such as automation, employment, trade, and developing foreign supply chain infrastructure. it has avoided the creative destruction impact that is chonic in the West. the US has critical technology inputs developed by DARPA, NIH, and NSF that have largely propelled its economy since WWII. This activity is a small slice of the economic coordination role of institutions in China.
nearly all the useful economic activity of the government in US can be done more efficiently, as Twitter could keep network and algorithms running with a fraction of its employees. DOGE will help, and we'll quickly recover any missing babies, but there is a more important service from DOGE - knee capping virtue-empathic paradigms growing in govt and NGO bureaus that champion such retrogression as intermittent energy, destabilizing governments and escalating separatist wars, and eliciting victims in our streets and schools.
what DOGE is likely blind to is the need to develop competent institutions to strategize, coordinate and increase markets. tariff and immigration shenanigans may convince some that the government is fighting for us, but the underlying obsolescence won't be changed without increase of state capacity. our intellectual resources being wasted on imagining grievances are desperately needed to build modern state institutions
I don’t dispute your commentary here, Dr. Pielke but the same ‘thinking’ about a tank also produced the Littoral Combat Ship, which was a disaster when we should have just built more destroyers. I think the Pentagon and many other government agencies tend to over think then get bad political advice/direction. Also, very efficient companies are forced to make cuts and live within budgets that often shrink all the time. Government budgets almost never do and rarely lose people. Being ‘understaffed’ is a normal function of nearly every organization. Government tends to whine about it more. I also think NWS will or can benefit by system upgrades and AI support. If anything can help analyze weather trends, models, and data quickly and efficiently it almost has to be AI. And that will likely cut government staff, IMO. None of this is easy, of course, and I still enjoy your columns and fair, deliberate analysis.
Roger - this is an outstandingly inadequate analysis. You set up a strawman - "Lutnick says we don't need people who think about xxx," and then proceed to show how silly it is. And you're correct, the assertion you make is silly. What Lutnick said is we don't need 1000 people thinking about xxx. And he's right. They're hedgehog technocrats who get in each other's way. They pile on unnecessary requirements sometimes leading to a $700 hammer. They increase the probability of groupthink. Bottom line - yes, we need people to think about xxx, but we have too damn many doing it right now.
A trivial example. Several years ago I tried to count the number of federal programs purporting to increase STEM proficiency. I stopped when I got over fifty in just seven departments. And, oh by the way, have you noticed that our kids are less proficient in STEM than they were in the last century? In some of our largest cities' school districts, there are NO - 0 - nada - eightgraders who are proficient in 8th grade math.
If you want to criticize the President's approach to paring (taking an ax to?) the federal bureaucracies, then please choose better ground. That ground is certainly there. There doesn't seem to be any semblance of a coherent plan. There are likely to be long-term impacts of cutting those who will become the next cohort of middle managers (primarily). Some important new initiatives will be delayed or abandoned.
However, also please recognize that whether you care for him or not, at least someone is finally starting to try to fill in our debt abyss. Our government is now paying more to service that debt than it is for our nation's defense. Important thinkers like Neil Howe (historian), George Friedman (geopolitical scientist), William White (economist), and Peter Turchin all predict a huge crisis in the next ten years, each looking only through their own lens. If our debt is not pared down, it could precipitate that crisis. Even if it didn't directly lead to crisis, the debt would limit our options to meet the challenges the crisis may pose.
I was very disappointed by this article as well. Roger usually doesn't go down the strawman path very often, but he completely ignores the very real and massive issues that exist with government spending that were ignored by past administrations. One critical insight that has emerged is how the federal government is (and has been) absolutely horrendous at just keeping track of its own spending. If you can't even do that, it's guaranteed that there will be plenty of funds poorly spent. The other elephant in the room is that the federal govt. has zero incentives to increase productivity. For example, you have "use it or lose it" budgeting practices which ensures that no rational manager would try to be economical with their spending. Why would they do that and cut their own budgets for future years? Given these conditions, it's inevitable that there will be plenty of waste in the system. I'm not sure it'll be significant enough to make a dent in the deficit, though, given the size of that gap. But that doesn't mean that this still isn't a worthwhile exercise.
Very good comment. I think government agencies and employees need to be evaluated on their added value. Do they increase value in their area, or decrease it? The Department of Education clearly decreases value, because since it was founded students have learned less, this is easy. What parts of NOAA and USAID add value? What parts decrease value? These are key questions and a little more complicated that the Department of Education.
Thanks John, I appreciate your critique, both its substance and tone.
Let's start with a big point of agreement. Yes, debt is a big problem.
And it should be dealt with.
But the focus on NOAA and AID is not going to make a dent in the debt, regardless how any of use think of these agencies.
I also agree with this:
"There doesn't seem to be any semblance of a coherent plan. There are likely to be long-term impacts of cutting those who will become the next cohort of middle managers (primarily). Some important new initiatives will be delayed or abandoned."
One point of disagreement, I'm pretty sure we need on order of 1000 people thinking about tanks and probably more than 2500 meteorologists!
The $20 billion slush fund uncovered by Lee Zeldin at EPA would pay for a lot more than 2500 meteorologists.
Focus on NOAA and US AID? Sorry, but every department has already felt some impact, with more to come. US AID is so Feb, NOAA may be March and we don't even know who's next. Bottom line is - reduce the head count, and you reduce the total cost to the taxpayers even more. And beyond the initial disruption we may actually get better decisions implemented sooner. Our federal government seems hellbent on providing continual proof of Pournelle's Iron Law of Bureaucracy.
As for tanks - don't see a need for more than a good balanced team of < 10. More than that you get the equivalent of a pier that can't stay afloat.
However, I hope we can agree that we won't have any permanent solution unless/until we can keep Congress and the lobbyists away from each other.
All government departments and agencies will eventually become bloated and inefficient because there is no reason for them not to. Unlike the private sector, where bankruptcy awaits those who allow their expenses to exceed their income, the public sector has no such constraints. And since it is usually to the personal benefit of managers in public sector entities to expand the number of their subordinates, public sector entities will almost without exception increase in size unless they are pruned at regular intervals.
This is nothing new, of course. Charles Dickens wrote about it in Little Dorrit in the mid-19th century. C. Northcote Parkinson wrote about it in his 1957 book Parkinson’s Law, from which comes Parkinson’s law itself: work expands so as to fill the time available for its completion. (Perhaps nowadays one should say ‘time and resources’ rather than just ‘time’.)
Since all public sector entities tend to increase in size and related budget regardless of the actual outcome, DOGE is a necessary part of the pruning process. Just don’t make it a permanent organization or it too will eventually become bloated and inefficient.
You just brought back thoughts of my initial introduction to National Accounting Frameworks from 50+ years ago at the home of Keynesian Economics.
We are going through our local annual town budget process now. We are faced with very severe shortfalls of revenue compared to spending on schools, roads, public safety, etc. Just as with your Tank Example, most existing spending generates some real benefits. The problem is that higher taxes have real consequences and negative benefits for taxpayers. Balancing both sides of the ledger is difficult and painful for all concerned. For me, the current DOGE process has pointed out many areas where past choices were highly questionable or made by default. Unfortunately, it does appear that a tank is being used to identify the waste rather than a scalpel - but then, little would change if the incumbents were asked to identify the waste or terminate their own jobs.
If one would try to follow the Secretary of Commerce's bizarre assumption, spending money on R&D and on Marketing would add no value to a company.
In particular, risking failure in R&D (does he know what means this acronym?) should be avoided.
This time, I'm not the one kidding.
Wow! The number of people doing essentially the same job is astounding. Do 2500 scientists studying the weather do any better than 250 scientists studying the weather? I don't know but it sure seems that the benefit is likely to be minimal and the cost is multiples higher. In the Federal agency in which I spent my career (35 years) we went from 60 in my office down to about 20 but our job description and duties changed very little. We still got the job done. In my opinion, nothing was lost although employee complaints increased about how much more work we were doing. When the head count was cut to 12 we still got the job done. The one thing that I noticed during all of this is that the quality of staff increased substantially. Essentially, we got rid of a lot of dead weight. The dead weight is not something I want to pay for and I believe most of the country would agree with me.
Roger,
Please accept a comment from an Australian experienced in interactions between industry and government "agencies" (to use a short word to summarise), interactions plausibly similar in your country and mine.
I read with consternation the dollar amounts and the scale of corruption revealed in DOGE reports over the last month or so. Time will tell if they are accurate. For now, they cast an imperative over all agencies to demonstrate that they do not deserve remediation. Consider the FBI in the period starting with the Hunter laptop, the Russian collusion papers, the role of the FBI in the January 6 2021 gathering, the Jeffrey Epstein alleged suicide in an anti-suicide cell and the FBI slow release of Epstein papers demanded by DOGE, and possibly more. There is enough prima facie information to lead to a plausible conclusion of significant wikedness.
You have shown a short case for NOAA to be treated lightly, but you have not provided much evidence of absence of wikedness FBI style. Is this not a little unbalanced? Geoff Sherrington
Wow, I have not yet viewed a comment that references the most basic fact about government spending. To this discussion, whether or not any government spending is valuable or not is completely irrelevant. The one relevant fact is that by definition government spending subtracts from the economy. Why? Because the government has no money. It is funded by taxes paid for with money generated from private sector economic activity. Counting salaries paid to government workers as economic activity would be double counting, because all of that money was already paid to someone else prior to it being paid in taxes.
The USAF gives as the reason for retiring the F22 is that they are too expensive to maintain, and the the NGAD is supposed to have all sorts of new stuff. The question is whether or not that is the best use of our defense dollars. AF brass will always say yes. In fact, all three branches of service are pushing for new toys. The Defense Industry is right behind them, and they probably have more influence than the Pentagon Brass. Stopping weapons production would cause massive unemployment, and the Defence industry put plants in every state to make sure the politicians understood that. It is exactly what President Eisenhower warned us about many years ago. It worked in the past, but the gigantic budget deficit has created a new situation.
What is missing is that government is a political entity and much of what it does is because a high ranking Senator/House member said they would support a bill if they got a piece of the pie. So while the blunt may be working now, it will stop working when voters are losing jobs. Military contractors have offices in 50 states to ensure that their projects continue to grow and get legislative support. The cuts so far - pretty easy going after agencies that are not well know n outside of Washington. But when the impact hits the broader community the cuts will slow down. It is why Congress cant pass a budget. No one wants to give up their pork.
If the people thinking about tanks and planes and ships give the public competent product, there will be very little complaint. However, when those thinking people deliver abominations like the Littoral Combat Ships and the $324 million movable pier that collapsed in Gaza because the waves were too big for it to handle, with no accountability, it is unrealistic not to expect howls of rage from the plebs extorted of their wealth to pay for such folly. Especially with income tax due in coming weeks.
Interesting article. But you are misrepresenting what Lutnick said. He indicated he was going to pull out the government portion out of the GDP estimate (based on what he said in an interview yesterday). This gives a clearer estimate of the growth (or not) of the private sector. Yes, the administration’s changes will impact the governments input and output. But I think it will be more accurate to represent them separately.
In the article you attribute the decrease of GDP to the Atlanta Fed forecast is not quite correct. It was based on an unadjusted model, GDPNow. “GDPNow is not an official forecast of the Atlanta Fed. Rather, it is best viewed as a running estimate of real GDP growth based on available economic data for the current measured quarter. There are no subjective adjustments made to GDPNow—the estimate is based solely on the mathematical results of the model”. The actual forecast will come later.
Your argument on the comment regarding thinking about tanks extrapolates far beyond what the comment said. You talk about the War College, DARPA and the Defense Intelligence Agency, technological innovations, etc.. It was interesting information, but not really relevant. By mentioning these, you imply all these things might happen, when all he said was a comment about thinking about tanks.
This sets an interesting precedent. If Lutnick justifies exclusion of government spending on grounds of "x is not GDP. That is wasted inefficiency, wasted money” then could we also begin to see other things cut from GDP, such as many things that would come under the classification of rentseeking activity, excess interest, a lot of other phony economic activity (finance, insurance real estate -FIRE- excesses)? Also, do you know if the Bureau of Economic Analysis already parses out FIRE activity vs. industrial production? What lines in the report would that be on or is it all hopelessly bundled?
I'm told by those who make a distinction between industrial capitalism & fiscal capitalism that US has a greater portion of FIRE GDP to industry than, for example, China, and so the GDP numbers are misleading indicators of economic robustness. It would be nice to have some simple line items to show the proportion of industrial productivity vs. rentseeking. Why just cut the fat from Government, why not from the whole economy? If only we all understood it better and were in a better position to negotiate.
Also, would be interesting to see how the "tax" from all that rentseeking activity compares to government tax as a portion of GDP. I don't think people keep track of how much they spend away on rents & interest embedded all along the supply chain of our lives.