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Perspective on the Growth of the Federal Government in Four Simple Charts


A friend on Facebook today noted an article by Kristen Powers that once again tries to argue that government has not grown under Obama.

It so happens that the claim that government is bigger under President Obama than any time in history — an oft-repeated trope — is actually not even true. Not counting the military, there were 3,054,000 federal employees in 1988, the last full year conservative standard bearer Ronald Reagan was in office. In 2011, there were 2,756,000 — a reduction of 10% from Reagan.

Sure enough, the linked table of government data does, in fact, indicate a reduced federal workforce. But that’s not the problem (and frankly it’s not a terribly accurate measure given that Lockheed Martin, Northrop Grumman, Booz Allen and other large contractors contribute a significant number of FTE jobs that are “off the books” so to speak in such a count. Make no mistake, these are people who work full-time for the federal government, but because their checks are written by private companies, they just don’t count.

Even if you suspend disbelief and pretend the Federal workforce has shrunk, that is only one measure of the Federal government’s size (and not a very good one, frankly). So what would be a better way to examine government?  Let’s start with the federal budget which currently stands at almost $3,800,000,000,000 ($3.8 trillion.)

But let’s put that in better context.

per capita income versus per capita government spending

In 1929, the average amount spent per US resident was $31.39. Per capita income at that time was $697. So government spending on your behalf would have worked out to about 4.5% of what you made. (NOTE: That wasn’t your tax bill. That was just what was spent on a per capita basis.)

In 2012, the average amount spent per US resident was $11,260.33. Per capita income sits around $42,693. Government spending per capita works out to about 26% of what the average person makes.

If per capita income had risen at the same rate as per capita spending, the average worker would be taking home $250,000 per year.

But that’s still not quite the perspective we’re looking for, so try this:

per capita income versus the growth of government spending

If per capita income had risen at a rate equal to the growth of total government spending since 1929, per capita income would be $647,081.

Yup, that’s right. That $697 dollars you were making in 1929 would have grown to almost three quarters of a million dollars per year.  Instead, while per capita income in the US has multiplied by a factor of 61, government spending has jumped 928 times what it was in 1929.

Still not impressed by how large government has become? Then try this on for size:

PopVersusSpending

In 1929, the population of the United States hovered around 121 million people. Today we’ve grown to 314 million people. That’s not quite triple our population in 84 years.

However, if the growth rate of the US population kept up with the growth of government spending, there would currently be 112.6 billion of us here in the US – that’s roughly 15 times the size of the entire world population right now.

But now comes the really scary number:

GDPVersusSpending

If you add up the value of everything single thing bought, sold, and produced in the US – our entire economic output – our country generated around $103 billion dollars in 1929.

In 2012, that number has grown considerably. Our Gross Domestic Product last year was $15.5 trillion.

Had our economy kept pace with the growth of government, however, our economic output would total a little over $96 trillion.

Now someone will say comparing growth rates of these three things is comparing apples to oranges, but I’m not saying these things are equivalent.

All I wanted to do, and hope I have done, is illustrate the growth rate of other key indicators relative to the growth of government spending.

When people try to tell you that government isn’t bigger, use this to give them some perspective.

(As a couple of housekeeping notes, the data and charts are available as an Excel Spreadsheet for anyone who wants them. All data comes from either www.usgovernmentspending.com or Google’s Public Data project. Both cite Bureau of Economic Analysis and Census Department data as their source.)



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Written by Michael Turk