Federal Receipts and Outlays as %GDP

Another look at how big our government has grown (or not)…

Here’s a chart I made from White House data on historical federal receipts and spending from 1931 to the present:

Nothing amazing or really stunning to see here, but it is informative.  For the last few decades the size of the federal government as measured as a percentage of the economy has fluctuated but not shown any definitive trend.  We’ve had a tendency to overspend on a regular basis.  No clear patterns related to political party in power jump out to me.  Prior to the current financial crisis, spending as a percentage of GDP peaked in 1982  excluding WWII (that did surprise me a little).

Government is NOT much bigger now than at other times during the post-war era when measured against GDP.  The massive U.S. national debt appears to be mostly due to policies of moderately overspending while reducing federal receipts over a period of many years — i.e. we keep spending a little too much as a country while also lowering tax collections.

So should government size generally be measured against GDP?  If GDP doubles is it optimal or necessary for government spending to also double?  I have no answer to those questions.  In other words, I can draw a few conclusions from the data in terms of where we are now compared to previous times, but I can’t tell you if that means we’re doing well or poorly.

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