"IMO the US has a structural problem economically because over 70% of its GDP is domestic consumption and DOGE is cutting back on that with the hope that manufacturing will compensate later..."
"Domestic consumption refers to products and services that are bought and used within the country where they are produced."
At 70% that cannot be domestic consumption. Actually, it can only be PERSONAL CONSUMPTION.
"The formula to calculate the components of GDP is Y = C + I + G + NX. 2 In other words, GDP is the sum of consumption (C), investment (I), government spending (G), and net exports (NX), which are imports minus exports. In 2023, U.S. GDP was 68% personal consumption, 18% business investment, 17% government spending, and negative 3% net exports".
DOGE is, obviously, trying to cut back on government spending. And government spending has two components:
"In national income accounting, when the government acquires goods and services for current use to directly satisfy the individual or collective needs and requirements of the community, it is classified as government final consumption spending. When the government acquires goods and services for future use, it is classified as government investment."
In conclusion, DOGE may be trying to reduce what it is ALLEGED deficiencies mainly in government final consumption and a bit, perhaps, in government investment.
The immediate effect of this will be a reduction in GDP, which Trump is saying that LATER ON will be compensated by increases in private investment through a tax cut and an ALLEGED removal of red tape (reduction in business costs)
As to the hope that manufacturing will be expanding and picking up jobs, he seems to be relying upon tariffs on almost every country on the planet and tax incentives.
