Federal spending as a percentage of GDP has been fairly flat for the past 60 years or so.
McClatchy‘s Kevin G. Hall (2/2/15) wants to drop some (conventional) wisdom on you:
Few things defy gravity more than federal spending. In the nation’s capital, what goes up does not come down. It goes up more.
Well, yes and no. The US population grows every year, and its economy grows on top of that most years. So it would be surprising if the real expenditures of the US government didn’t generally get bigger and not smaller over time.
Hall tries to make that natural increase sound paradoxical, even sinister:
When President Barack Obama was elected, there was a temporary $535 billion increase in spending during the Great Recession. Yet as the recession faded and that spending ended, total spending eased just a fraction and just temporarily, never returning anywhere near the pre-recession total of $2.9 trillion.
“Yet”—as though one would normally expect the government of a country with 301 million people and a $14.5 trillion economy, as the US had in 2007, to spend the same amount as a country with 320 million people and an $18.1 trillion economy, as the US is projected to have in 2015.
As a percentage of the US economy, which is a more reasonable standard, the size of the federal government does, contrary to Hall’s lead, go up and down: Federal spending was 22.3 percent of GDP in 1982, and 17.4 percent in 2000. At the height of World War II, which was the last time the United States faced a serious military threat (sorry, Cold War and “War on Terror”), federal spending topped out at 40.7 percent of GDP.
It’s true that the proportion of the US economy devoted to federal spending increased markedly as Washington took on responsibility for insuring retirement (Social Security) and healthcare for the elderly (Medicare). These programs are very popular because they are very successful at doing what they are intended to do, which is reducing the chances that our grandparents, our parents and finally ourselves will end our lives in poverty, sickness and misery.
Some would see this as a good thing.
Do you lie awake nights worrying that people like this are getting too much healthcare? If not, you’re probably not the right kind of person to be writing about economics for the corporate media. (cc photo: Ben Smith)
But not Kevin Hall. “About half our spending these days is going to Social Security and various health programs, and most of those are extraordinarily popular politically,” he quotes austerity advocate Rudolph Penner, then comments from his own perspective:
Therein rests the problem with federal spending. It’s hard to cut programs that have a constituency with a vested interest.
By “a constituency with a vested interest,” he means the people whom Social Security and Medicare are designed to help, i.e. “the tens of millions of Americans who receive checks from the government”:
Want to reduce benefits or make significant changes to Medicare, the health program for those 65 and over? In 2014, there were 53.8 million Americans enrolled in Medicare…. Want to change the way cost-of-living adjustments are calculated for Social Security recipients to slow rising costs? There were 62 million of them as of December.
But do people who aren’t yet on Medicare really want their parents and grandparents to receive less healthcare? Are they hoping to get less healthcare themselves when they retire? On Social Security, do they want their elders’ retirement checks to be able to buy less every year, which is the effect of “chang[ing] the way cost-of-living adjustments are calculated” (FAIR Blog, 12/9/12)? Is that the kind of retirement that the young and middle-aged are looking forward to?
It’s not that the United States can’t afford to keep supporting its elderly in the not-particularly-generous manner that it does today; the big debt projection numbers Hall throws at us turn out to be not so big when you look at them as a percentage of the projected economy. He wants us to be alarmed that Obama’s budget plan would move the federal government’s share of the economy from 20.9 percent today to 22.2 percent in 2024—”higher than post–World War II averages,” he points out, but a trivial redistribution of what is expected to be a much larger economic pie.
But redistributing that pie would mean taking back a small fraction of the enormous gains that the wealthy have made over the past 40 years. And if there’s one thing that journalists whose job it is to explain the economy to the rest of us are paid to understand, it’s that the rich getting richer is meant to be a one-way street.
You can contact Kevin G. Hall, McClatchy Newspapers‘ chief economics correspondent, at khall@mcclatchydc.com. Please remember that respectful communication is most effective, and feel free to leave copies of your message in the comments below.
Government control and debt will grow because of the dependency of old and young alike on the government. Government growth exploded with World War I and the New Deal with funding coming from the fortuitous institutionalization of the 1913 income tax and central banking.
What is meant in writing the rich getting richer is meant to be a one-way street? Are we to make a two-way street by taxing the rich? Just because we helped create the rich with welfare spending does not mean two wrongs can make a right. Better to end the welfare state with its redistribution from those with earned income to those with unearned income.
@ Ernest Matinson
I love the way you rightwing ideologues (or as I suspect in your case wanna be right wing ideologues) cement-headedly ignore every single fact presented in the article – govt spending on helath care for the old IS GOING DOWN AS A PERCENTAGE OF GDP NOT UP – JACK ASS read it again…then read it again until you can get your mind around such complicated concept. Then come back and argue why that’s a bad thing too.
“What is meant in writing the rich getting richer is meant to be a one-way street? Are we to make a two-way street by taxing the rich? ”
seems simple enough to me..read it again if you need to
“Are we to make a two-way street by taxing the rich?”
Yes..now your getting it.
“Just because we helped create the rich with welfare spending does not mean two wrongs can make a right”
F@$%ING WHAT ??? !! Are you really claiming that the absolute minimum payments made to people on Social Security (an income insurance program which they’ve paid enough into to receive benefits from ) are making them rich ? I am sorry I called you a jackass..Your obviously mentally ill. .
First, social security is not “spending.” Spending involves purchasing something and thus also commanding the production of goods and services. S.S. is a “transfer payment” from workers earned income and business matches to SSI recipients. Food stamps, welfare, earned income tax credits, unemployment insurance, disability, etc. in the safety net operate similarly to provide broad buying power by recipients. It is all welfare redistribution that should be removed from the total “size” of government spending. Then we’d see how true spending by government has rapidly shrunk!
Secondly, social security is unique in two horrid ways: (1) it “dignifies” the lie for anti-government recipients that it’s an actuarial-based insurance plan that gives back what was paid in (seniors today are the only age demographic that didn’t vote for Obama), and (2) it is “reverse Robin Hood” because seniors have by far the lowest poverty rate (only 7%) and payroll taxes are heavily regressive, especially for the working poor. If it weren’t for the decades of GOP demands to gut or privatize Social Security, serious Democrats would insist on massive reform to what is the worst-designed such program in the world.
In my opinion, what is at stake is; whether or not we, all Americans have the same rights, most notably, The Basic Human Rights? There are six Basic Human Rights; food and shelter, medical, free higher education, jobs, free speech, and the right to life. Should we deny any of these rights from anybody, we would actually de-humanize the person. The rich, and the powerful have ALL of these Rights, and the rest of us have some, but in general, we have to fight for these Rights.
Nobody talks about the export of all kinds of jobs from the U.S., millions of these jobs have left had left the U.S., have created devastation in so many of our cities, and communities. While every year we get more young people join the millions who are looking for the disappearing jobs, our government is spending trillions on the so called “defense,” and doing NOTHING TO STOP THIS EXPORT OF OUR JOBS. In ten years, we have exported 10, or more millions of jobs, while we had a decline in wages, more companies lay-off the full time employees, and hire part time employees to avoid to pay the benefits, and the labor statistics does not differentiate the new jobs being a part time, from the full time jobs. We are the only western industrially developed country that has no single medical insurances that cover all the population, regardless of their employment status, age, or any other characteristic. Our “Defense” department can buy a stealth bombers at $2.2 BILLION per one, but our Government is unwilling to provide adequate medical coverage for all Americans.
We have managed to incarcerate more people than any country in the world, be it per every 100,000 population, or the actual numbers, why?
Looking at the absolute difference in income between the top, and the bottom we find a huge, astronomical gap; 400 times! It is not just unfair, it is insane, irrational, and criminal to allow the 1% to live like maharajas, while we can look away at the millions of the homeless, the sick who can not afford to get a medical help, and the desperate unemployed whose jobs were taken away from them.
In conclusion, I will quote Gerry Spence who defines our politicians as the ‘highest paid prostitutes.’
I just thought of an idea, what if one summed up the total wealth of the 5% of the top population, and compare it to the National Debt? Would they be equal? Could the 95% of the population be so low in I.Q. to justify such huge difference in wealth, and income? I do not think so, and corollary, it is not the difference in the people’s I.Q. that determines this huge difference, that it is the SYSTEM that is at fault.
“It’s hard to cut programs that have a constituency with a vested interest.” Folks who paid into medicare or social security have a vested interest in medicare or social security. Why not try going after public education, medicaid and welfare benefits for illegals?
Tell Brian Williams to stop lying
And find a new job,on he got to
Good on lying
Brian Williams how can you
Not know if you were being
Shot at. Stop lying,fine a new job,he got to good at lying!##
Watch out! Decreasing health care for us old folks will probably make us live longer!
If we had a single payer healthcare not controlled by the health care price gougers, we could eliminate the deficit tomorrow. After all, we pay $1 trillion more per year than any other developed country ($3200 per person per year x 315m) and have the worst medical system. We already pay enough for universal coverage.
Then we can quit paying for half of the world’s military expenses each year. When you add up everything (not just the DOD) it comes to about $1 trillion per year. We could cut it in half and still have the largest military spending in the world. Why do we need to be the policeman of the world? To make the world safe to outsource US jobs?