All the Numbers You Always Wanted on Government Spending (But Were Afraid to Ask)
January 9, 2013
(Come for the pretty graphs; stay for the mounting sense of terror!)
I thought it would be useful to have all these data together in one place for easy reference, illustrated with easy-to-understand graphs, with links to solid sources. I’ve even added a convenient hyperlinked table of contents:
To be honest, I put this together more for my convenience than for anyone else’s, but of course if you find it useful as well, feel free to use and share it.
In 1902 (the first year for which data are available), government spending in America (federal, state, and local—all of it, combined) took up only 6.9% of the economy (GDP); in 2010 (the last year for which data are available), it was 41.0%.
In other words, in just a few generations, the government has gone from well under a tenth to representing more than two fifths of all economic activity in the country.
(For those not concerned yet: If you’re not actually a Communist, you don’t want that number to reach 100%. How high would it have to get before you would be concerned? Do you have reason to believe that, contrary to the trend of more than a century, government will stop growing now? Do you know something we don’t?)
That’s a remarkable statement to be able to make, but it’s true: Dollar for dollar, forced redistribution is not only the single biggest thing the federal government does, but is the majority of what it does.
Don’t take my word for it; take it from these guys (scroll down to the pie chart), who think these programs are a good thing: The chart shows the “entitlement” programs Medicare, Medicaid, and S-CHIP (Wikipedia) together accounting for 21% of federal spending; Social Security 20%; and other “safety net” (i.e., forced-redistribution) programs 13%, for a total of 54% of all federal spending.
Defense (apparently including foreign aid)—you know, the core function of the federal government, the main reason for having a federal government at all—comes in at 20%.
The only non-arbitrary way to define “fair share” (say, for purposes of federal income taxes) would be a flat rate—I.e., if the rate is (e.g.) 15%: If you earn $20,000 a year, you pay $3,000; if you earn $100,000 a year, you pay $15,000; etc.
Some people have the mistaken idea that the rich, whether because much of their income is taxed as capital gains or through other “loopholes”, are overall actually paying less than a proportionate share. The truth is just the opposite, and dramatically so:
- The top 20% of Americans earn 50.8% of the income in the country (including capital gains) but pay 94.1% of the federal income taxes.
- The top 20% earn 50.8% of the income but pay 67.9% of all federal taxes. (“Federal taxes include individual and corporate income taxes, social insurance (or payroll) taxes, and excise taxes.”)
As you can see from the government’s own data (linked from this page, Congressional Budget Office), under President Obama, the federal government has borrowed more than a third of every dollar it spent for all years for which data are available (40.2% of every dollar spent in 2009, 37.4% in 2010, and 36.0% in 2011). This is sharply up from the numbers under Bush.
You can easily get the numbers the same way I did: Go to the Excel spreadsheet linked above, go to rows 51-54 (2009-2011), and divide column L (deficit, or revenues minus outlays) by column D (“outlays”, i.e. spending).
Don’t take my word for it; this piece, which tries to give conservatives no quarter, agrees with my math.
(It also offers more sanguine projections of borrowing only 27¢ for every dollar spent in 2012—which would still be terribly irresponsible, and much worse than any year under Bush—but unfortunately we now know that even that didn’t pan out: According to CNN, the federal deficit in fiscal year 2012 was 1.1 trillion dollars and spending 3.54 trillion, which comes to borrowing 31.1% of every dollar we spend. According to the Department of the Treasury, in the two months after that, we were already back up to borrowing 45.8% of everything we spend.)
- Update (January 14th, 2013): U. S. Government Debt .US also offers this (federal deficit as fraction of total federal spending each year) among its chart customization options. Here’s a bar graph of the Bush and Obama years. Obama’s third-of-every-dollar borrowing is higher than any other time since World War II.
Borrowing a third of every dollar we spend means, in other words, spending 50% more money than we have. It’s as if a man making $40,000 a year were living way beyond his means and spending $60,000 a year, putting $20,000 on the credit card—every year, year after year.
Sure, if you call spending 50% more than we take in “responsible”. Just for comparison, here are the federal budget deficits for the Obama and Bush years:
As you can see, the smallest deficit under President Obama is more than twice as bad as the worst year under Bush.
Again, don’t take my word for it; this site, U. S. Government Debt .us, shows the numbers and links to its sources. It also lets you customize the chart; so you can see that again in inflation-adjusted dollars if you would prefer. It doesn’t make much difference. Here’s the same comparison with every president going back to Reagan. Go ahead, take a look; Obama’s deficits (a trillion dollars a year!) dwarf them all.