Federal government did not grow from the fifties?

[eugenekop]

Look at this chart please.

http://www.usgovernmentspending.com/spending_chart_1903_2012USp_13s1li011mcn_F0f

Spending was 21% of GDP at 1961 and at 21% of GDP in 2008 (before the recession).

Can you explain this? I thought the federal government grew enormously in the last decades.

 

[libertyjam]

The blip in the '50's was the Korean War. (Police Action in euphemism-speak )

 

[acptulsa]

I think this shows just how much of what the federal government appropriates it doesn't spend. Instead, it takes its cut and gives the rest to the states to spend--if those states jump through all the hoops.

Is this more like what you expected? http://www.usgovernmentspending.com/spending_chart_1903_2012USp_13s1li011mcn_F0t

 

[Chester Copperpot]

Look at this chart please.

http://www.usgovernmentspending.com/spending_chart_1903_2012USp_13s1li011mcn_F0f

Spending was 21% of GDP at 1961 and at 21% of GDP in 2008 (before the recession).

Can you explain this? I thought the federal government grew enormously in the last decades.

Any numbers based on GDP are meaningless and inaccurate. Govt spending makes up a GDP component so the bigger govt gets, the bigger GDP gets... figuring percentages off that figure is a bad idea, thats why govt uses it.. Try GNP instead.

 

[Zeeder]

Any numbers based on GDP are meaningless and inaccurate. Govt spending makes up a GDP component so the bigger govt gets, the bigger GDP gets... figuring percentages off that figure is a bad idea, thats why govt uses it.. Try GNP instead.

I second this. Statists love to quote GDP numbers in that fashion. Honest people need to undetstand that when looking at past numbers, the government is always going to change the accounting to make the case for.............more government.

This is also done with tax rates. The rich used to pay 99% tax rate! Or some very high number, but the tax code has change a billion times since then, so it's almost impossible to compare the time periods.

 

[eugenekop]

I think this shows just how much of what the federal government appropriates it doesn't spend. Instead, it takes its cut and gives the rest to the states to spend--if those states jump through all the hoops.

Is this more like what you expected? http://www.usgovernmentspending.com/spending_chart_1903_2012USp_13s1li011mcn_F0t

Well, even with total spending it goes from 30% in 1960 to 32% in 2000.

 

[acptulsa]

Well, even with total spending it goes from 30% in 1960 to 32% in 2000.

And look at how well the economy did during that dip leading up to 2000, too! Which not only goes back to what was said earlier about GDP, but says something about the folly of trying to legislate and regulate one's way out of a depression.

 

[cubical]

Compare the consumption of the 1950s vs 2012 as part of the GDP. So you need to check your assumptions before you analyze. GDP is not a great measuring stick.

 

[Zippyjuan]

Compare the consumption of the 1950s vs 2012 as part of the GDP. So you need to check your assumptions before you analyze. GDP is not a great measuring stick.

OK. Let's take a look.

Personal Consumption Expenditures (PCE)
as Share of Gross Domestic Product (GDP)

http://www.stlouisfed.org/publications/re/articles/?id=2201

 

[erowe1]

The chart that shows how much government grew is the one that measures its spending in $ bln 2005.
http://www.usgovernmentspending.com/spending_chart_1903_2012USk_13s1li011mcn_F0f

Since GDP has grown faster than inflation, then for the government to stay the same size, its share of the GDP would have to decrease over time.

 

[eugenekop]

The chart that shows how much government grew is the one that measures its spending in $ bln 2005.
http://www.usgovernmentspending.com/spending_chart_1903_2012USk_13s1li011mcn_F0f

Since GDP has grown faster than inflation, then for the government to stay the same size, its share of the GDP would have to decrease over time.

You forget population growth. Perhaps you mean this graph: http://www.usgovernmentspending.com/spending_chart_1903_2012USd_13s1li011mcn_F0f

Though I don't understand why this graph is so different from the GDP graph

 

[eugenekop]

OK. Let's take a look.

Personal Consumption Expenditures (PCE)
as Share of Gross Domestic Product (GDP)

http://www.stlouisfed.org/publications/re/articles/?id=2201

I don't understand how is this related to government spending

 

[erowe1]

You forget population growth. Perhaps you mean this graph: http://www.usgovernmentspending.com/spending_chart_1903_2012USd_13s1li011mcn_F0f

Though I don't understand why this graph is so different from the GDP graph

You're right that it's better to use $ bln 2005 per capita.

The reason it's so different is that GDP has grown faster than inflation and population growth combined.

 

[Zippyjuan]

I don't understand how is this related to government spending

I believe that Cubical was trying to make the point that GDP was rising because government spending was rising (government spending is part of GDP hence the suggestion to see if consumer spending was actualy rising- the other major component of GDP). Seems both were rising. Government spending can rise and its percentage of GDP stay the same if GDP rises at the same rate that government spending increases. My appoligies if I misrepresent the point he was trying to make.

 

[erowe1]

I believe that Cubical was trying to make the point that GDP was rising because government spending was rising (government spending is part of GDP hence the suggestion to see if consumer spending was actualy rising- the other major component of GDP). Seems both were rising. Government spending can rise and its percentage of GDP stay the same if GDP rises at the same rate that government spending increases. My appoligies if I misrepresent the point he was trying to make.

Yeah, mathematically, if federal spending is the same percent of GDP at two different points in time, then it must also be the case that federal spending is the same percent of (GDP-federal spending) at those same two points.