A Look at Government Spending

Today is the day that the Congressional Budget Office releases its big report on what the government is (ahem) supposed to spend over the next few years.
One of the things I find interesting is that spending by the federal government has been much less variable than most people realize. From the sound of political debate, you’d think this was highly volatile number, but that’s not the case.
For the last thirty years, non-defense spending has averaged about 16.3% of GDP. When the economy does poorly, the number rises to around 17%. When the economy does well, the number falls to around 15.5%. From Carter to Reagan to Bush to Clinton to Bush, that rule has been pretty consistent.
Please note that I’m saying what the government should spenf, or even what it will spend. I’m simply noting what has happened. Here’s non-defense spending as a part of GDP going back to 1976:

Here’s the data.

Posted by Eddy Elfenbein on January 24th, 2007 at 1:46 pm

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