Simon Kuznets, the Nobel Prize-winning inventor of Gross National Product/Gross Domestic Product statistics, worked for the public sector for the greater part of his career. It is therefore not surprising that government output is included in GDP at its full cost, however useless or indeed damaging the activity undertaken by the bureaucrats concerned. Conversely, Kuznets was apparently happily married for 50 years, with two children; it is thus quite surprising that his calculations ignored altogether the value of output by “tradwives.” As you would expect, since in economics over time you get more of what you measure, governments have bloated monstrously since Kuznets’ time, whereas wives have been forced into the workforce by both social and economic factors. In the past half century of bloating government and unhappily working women, GDP growth has grossly overstated the true trajectory of living standards for ordinary people. Both of Kuznets’ measurement errors must be reversed, which will produce smaller government, happier families and far greater satisfaction among the populace.

I have written previously about the evils of the GDP statistic as it relates to government, and suggested an alternative measure of Gross Private Product, in which government’s output is valued at zero. Private sector organizations that make losses are not allowed this benefit in GDP statistics; their output is valued at their revenue level, not their costs, and even in a Ben Bernanke funny-money economy, private sector organizations that make persistent losses are eventually put out of their misery by bankruptcy courts, though it may take decades for this desirable termination to occur. Of course, no power of heaven or earth can put a loss-making government out of business.

The truth is somewhere in between the Gross Private Product measure, in which government output is valued at zero and the official measure, in which every wasteful and bloated cost is included. Nations need defense, for example, and the correct level of defense provision is a political decision to be taken by Congress and the administration. Equally, the armed forces today have an excessive “tail” of bureaucrats – current estimates are that 40% of total spending represents administrative tail rather than equipment or fighting forces; if true this amount of $500 billion per annum should be excluded from GDP since it adds no value. At the other end of the usefulness scale, government departments such as the Environmental Protection Agency and the Occupational Safety and Health Administration exist solely to load additional regulatory costs on U.S. businesses; their budgets should thus be subtracted from GDP rather than added to it.

Kuznets, a lifetime Big Government man, would doubtless have been delighted that his GDP calculation led to the government’s aggrandizement. From the earliest years of the statistic, politicians have used GDP to measure their success; a healthy increase in GDP could be attributed to their wise policies. During the New Deal and again during the Great Society 1960s, this statistical anomaly encouraged Democrat administrations who wanted to expand government anyway. If their opponents questioned the wisdom of government expansionism, they could point to the expansion in GDP that accompanied it – this was especially useful during the 1930s, when poor economic policies left other sources of GDP growth hard to find. As Harry Hopkins was quoted in the New York Times in November 1938, they would “tax and tax, spend and spend, elect and elect” – even the New York Times columnist (Arthur Krock) described this set of policies as a “sinister combination.”

However, the construction of GDP aided Hopkins’ madness, and sharply hindered future Presidents such as Richard Nixon and Ronald Reagan, who attempted to restrain the insane bloat of government – by doing so they would knock the reported growth rate, and lay themselves open to attack by unscrupulous state-bloaters. Even in 2026’s second quarter figures, released this week, the uninspiring 1.5% growth rate was artificially low, held back by a blessed contraction in the Federal government. Only the missiles fired at Iran, whatever conceivable purpose they may have served, kept the headline GDP figure sustained. Revising the GDP definition, either to GPP or to something that accurately measures the actual economic benefit (or more likely damage) generated by each bureaucrat is an essential economic reform.

By the 1970s, bloating government still further was threatening to do serious damage to the economy, so the Left came up with an alternative strategy to grow reported GDP without improving people’s lives: feminism. If married women could be coerced into the workforce, reported GDP would increase, even though the married couples would now require daycare, numerous expensive takeouts, an unattractive but costly “work wardrobe” and perhaps a cleaning lady, all of which would be counted as output. Indeed, in an absurd example of the GDP statistic’s folly, if a lonely bachelor married his cleaning lady, reported GDP would decline, even though exactly the same goods and services were being provided.

Looked at in this light, 1970s feminism, from Betty Friedan on, can be seen as yet another sinister socialist plot. If women could be coerced into re-entering the workforce, all sorts of government-provided services such as daycare could be established, increasing both GDP and government control of everybody’s lives, even though the living standards of married couples would have been sharply hit. Since most rational men have no wish to be married to the harridan Betty Friedan, nor rational women wish to emulate her, the welfare of both sexes was badly damaged by the feminist movement, but government was further bloated and reported GDP was increased.

In principle, therefore, we must reform GDP to include the output of tradwives. Their contribution to the family is a very important part of economic output, especially in cases where the husband has a high-powered job that would be impossible without his wife’s support. (By all means, the same applies to high-powered women with “trad-husbands,” provided the husbands look after the house and children, cook adequately and do not just sit around playing video games.) This reform will lead public policy, social mores and lifestyle choices back towards the 1950s ideal of a traditional suburban family, with the non-working partner shepherding numerous children to their various activities in a gigantic Buick estate wagon or minivan.

The decline in U.S. fertility over the last half-century is very largely due to the trend towards two-career families. It has made all but the highest-earning, most dreamy men unattractive to women who are already supporting themselves, thus delaying marriage until the fertility Doomsday Clock is standing at three minutes to midnight. The couple with two established careers and no children may enjoy a wonderful series of exorbitantly expensive vacations, but they are likely to be unhappy in old age, and there is always the chance that one or other will run off with a male/female bimbo. Society has taken a wrong turn, and Kuznets’ warping of economic statistics is very largely responsible.

In the long run, of course, robots and AI may solve all this. The difficulties of measuring household activities will end when robots and AI can perform them directly. That performance will entail a certain cost for purchase or rental of the appropriate equipment and of course electricity charges, and those costs can be used as a proxy for the value of the services performed. This will be a much more accurate estimate than in the case of government services, which are valued at cost with no market control of whether the services are merited. Of course, there will always be exceptions to the valuation – the exquisite homemaker who keeps her house spotlessly clean and looks after several children in a low-income family, or the rich dilettante married to a billionaire who sits around eating bonbons, but at a macro level, averaged over the entire population, this measurement should be sufficiently accurate.

The MAGA crowd are not wrong in believing that the increase in national wealth since the 1970s has done very little for them – much of it has been eaten by government or is an artificial creation of their long-suffering 2-career families. However, reforming GDP accounting, and ensuring that such reform takes priority over the traditional GDP statistic, will allow the benefits of the idyllic 1950s lifestyle to be available to all who want them, and personal satisfaction of the entire population, of course with a few eccentric minuses, will thereby be greatly increased.

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(The Bear’s Lair is a weekly column that is intended to appear each Monday, an appropriately gloomy day of the week. Its rationale is that the proportion of “sell” recommendations put out by Wall Street houses remains far below that of “buy” recommendations. Accordingly, investors have an excess of positive information and very little negative information. The column thus takes the ursine view of life and the market, in the hope that it may be usefully different from what investors see elsewhere.)