We all should know that the public sector is just as much part of the GDP as the private sector. Knowing this, we need to separate the two in order to see what is causing the slower than average GDP growth overall. It turns out that the private sector is doing alright, not fantastic, but alright.
In the first quarter of 2012, the private sector was growing at about 3.2% according to a report by Alliance Bernstein. The public sector on the other hand contracted 3.9% in this same quarter.
Over at the American Enterprise Institute, hardly a progressive or liberal think tank stated, “Maybe the private sector is doing fine”
“In the second quarter of 2012, “public sector GDP” decreased -1.44%, and that was the eighth straight quarter of negative growth for total government spending, averaging -2.88% per quarter over the last two years.
In contrast, there have been 12 consecutive quarters of positive growth for private sector GDP averaging 3.07% per quarter in the three years since the recession ended, which is slightly higher than the 2.8% average growth rate in private real GDP over the last 25 years.” according to AEI.