The prior post in this series is here.
In a free market economy, the largest allocator of resources is the sum total of all domestic workers/employees (over 50% of GDP), and the second largest is the private sector businesses (over 25% of GDP):
But increased government spending crowds out these private actors (workers and businesses), making too much of the resources ending up being allocated by just a few government actors who make policy decisions worth billions or even trillions of dollars of someone else’s money, which is the hallmark of a command economy:
The evidence suggests that we should restore a free market economy to the USA. A sign that we’ve done so could include the finding that the private sector wages once again comprised over half (over 50%) of GDP, like back in 1953 (top graph) — rather than the current value of under 45% of GDP (too few are making too many decisions).
Reference
[business profit share of GDP] — U.S. Bureau of Economic Analysis, Shares of gross domestic income: Net operating surplus: Private enterprises [W260RE1A156NBEA], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/W260RE1A156NBEA
[wage share of GDP] — U.S. Bureau of Economic Analysis, Shares of gross domestic income: Compensation of employees, paid: Wage and salary accruals [A4102E1A156NBEA], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/A4102E1A156NBEA
[government share of GDP in USA over time] — International Monetary Fund (2025). https://ourworldindata.org/grapher/historical-gov-spending-gdp?tab=chart&country=~USA