Would GDP be more accurate if it removed government spending?

Gross domestic product is most accurate when it accounts for all of a country’s economic output, including that facilitated by government spending.

GDP measures the dollar value of all the goods and services produced in a country and consumed by end users in a given period of time.

Government spending funds a significant amount of the economy’s production, including national defense, infrastructure, education, health care, policing, and firefighting. In 2023, it represented 36% of U.S. GDP, according to the IMF.

Excluding government spending would render GDP an incomplete picture of a country’s economic output, making it more difficult for economic actors in the public and private sectors to make sound policy and investment decisions.

Separate measures exist for measuring economic efficiency, including productive efficiency, which compares actual production to productive capacity, and allocative efficiency, which measures how closely production matches the wants and needs of consumers.