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Federal Spending as a Percentage of GDP

Advocates of big government use Debt-to-Gross Domestic Product (GDP) ratios to mask the bizarre fact that government spending is actually used to inflate the calculation of GDP.  A much better way to see the enormity of the problem of government debt is to note how much government spending has increased as a percentage of GDP.

Does government spending qualify as part of the United States' Gross Domestic Product?  Bizarrely, yes.  This article explains the components of GDP, and government spending somehow made the list.

The chart and explanation on this page show that
Government spending at the start of the 20th century was less than 7 percent of GDP. In the 1930s spending doubled to 20 percent of GDP. Defense spending in World War II drove overall government spending over 50 percent of GDP before declining to 22 percent of GDP in the late 1940s. In the 1990s and 2000s government spending stayed about constant at 33-35 percent of GDP, but in the aftermath of the Crash of 2008 spending has jogged up to 40 percent of GDP.
Jogged up is a rather tame way to describe high levels of government spending that are not healthy.

The Heritage Foundation noted in this 2012 report that
total federal spending for fiscal year 2012 reached $3.6 trillion, or 22.9 percent the size of the entire U.S. economy. In the past 20 years, federal outlays have grown 71 percent faster than inflation.
It noted the main culprits--entitlement programs.
Federal entitlements are driving this spending growth, having increased from less than half of total federal outlays just 20 years ago to nearly 62 percent in 2012. Three major programs—Medicare, Medicaid, and Social Security—dominate in size and growth, soaking up about 44 percent of the budget. All three programs are growing faster than inflation...
The amount of spending currently occurring in Washington DC is unprecedented.  With the exception of a few years during World War II, the percentage of federal spending to Gross Domestic Product is at a long-term, all-time high.

Something's gotta give.




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