One of Governor Sanford’s illustrations of SC wrongdoing is the percentage of the state’s gross domestic product (GDP) dedicated to local and state government. The state GDP is the sum of all output produced by economic activity within the state. SC spends 11.3% of its GDP on local and state government, and the national average is 8.7%. If SC’s 11.3% is divided by the nation’s 8.7%, the number is 1.29, which means SC spends 29% more than the national average. Sanford, in the interest of easy verbal delivery, rounds up to 30%.

Another big chunk of the state’s GDP is manufacturing, which is also more than the national average. Manufacturing is 20% of SC’s GDP, but we don’t spend 20% of the GDP on manufacturing. Manufacturing is output produced by economic activity. State and local government, on the other hand, couldn’t exist without spending money collected as taxes, fees, and fines. To generate 11.3% of SC’s GDP in government, SC must spend 11.3% of its GDP for government.

There was considerable concern last week in the local press that Sanford was misleading, at best, and plain wrong, at worst. One writer’s expert in questioning Sanford’s “30% more” statement was the state's chief economist, a government worker. Government workers don't want to hear state government is bloated. Government workers don’t care for Sanford’s efficiency and performance standards. A journalist not exercised in economics should be praised for inviting expertise, but the expertise should come from academic or business circles, not governmental.

The problem among local journalists with the statement, “SC spends 30% more on state and local government than the national average,” is simple semantics. Most journalists went to journalism school, and some of the fun in the profession is the opportunity to learn about what was never even approached in college and then write about it. Economics, that dismal science, needs more exposure at most j–schools. Graduate–level business courses are reserved for those enrolled in graduate–level business programs.

Economists and near–economists, such as erudite business and political leaders who earned graduate degrees at elite schools, all speak the same language. Dr. Michael Porter, author of The Competitive Advantage of Nations , is a professor at the Harvard Business School. He is also a consultant guiding SC’s drive toward a higher per capita income. Porter readily speaks the language that concludes “SC spends 30% more on state and local government than the national average.”

Porter and Sanford and the SC Department of Commerce communicate on the same level. Sanford earned his MBA at the Darden School (UVA), and his head at Commerce, Bob Faith, studied under Porter at Harvard, where he earned an MBA.

Porter’s book compares the GDP among nations, and it cites percentages of the GDP dedicated to health care, military, education, and the like.

In The Economist , arguably the world’s best news and business weekly, nations are compared by how money is spent, and every comparison falls back on the GDP. Annually The Economist publishes its World in Figures, where nations are compared through lists and percentages of the GDP.

The US, to use an example, spends almost 15% of its GDP on health care, while we have 45 million people uninsured. In other words, we spend the most and we have the best, but our delivery systems fail far too many. The countries of the European Union average about 9% of the GDP on health care, and they are famous for universal delivery of health care. Divide 15% by 9%, and the final number illustrates how much more the US spends on health care, 67%.

Another example compares Britain and the European Union and what they spend on government. The European Union averages 48% of the GDP for government, and Britain’s GDP is 42% government. Divide 48% by 42%, and we find the EU spends 14% more on government than Britain. That’s how nations are compared.

That’s how states are compared. That’s how Sanford can logically conclude SC spends 30% more on state and local government than the national average.