Since 1933 (FDR taking office), what years has the Federal government reduced spending. I figure a reduction can be figured 2 ways:
- Nominal - the actual number of dollars is reduced
- Real - any increase in spending is less than the rate of inflation
Nominal or real spending are both poor ways of looking at the history of government spending. Nominal spending will always go up because of inflation. But even real spending will also go up as the population grows. A better way of looking is government spending as a percentage of GDP: here is a graph showing just that.
1930s and 1940s: The New Deal took spending from around 4% to 10%. Spending then shot up to nearly 50% of GDP during WWII before dropping back to 13% in 1946.
1950s: It rose steeply to 20% after 1950 before dropping back to 15% a few years later, I’m not sure why, I assume that’s the Korean War.
1960s: It then stayed at about 17% until 1962. Between 1962 and 1965 it slowly dropped to 15%, before sharply rising back to 17%, I’m guessing because of LBJ’s Great Society programs like Medicare.
1970s: It dropped to 15% in the mid-70s, then quickly rose to about 17% again. I’m not exactly sure why.
1980s: It then shot up to 21% in the early 1980s under Reagan, due to a combination of tax cuts and recession. It gradually dropped back to 18% in the late 80s as the economy improved and Reagan implemented some spending cuts and new taxes, but it hit 20% again in the early 1990s due to the recession.
1990s: Between 1991 and 2000, as a result of the budget bills passed by both George H.W. Bush and Bill Clinton, and because of a strong economy, spending fell to just 15% again.
2000s: Between 2000 and 2008, the combination of George W. Bush’s tax cuts and spending programs and the short recession after 9/11 brought spending back to about 17%, but the financial crisis between 2008-2009 forced spending up to 22%. It’s currently dropping but it’s still up around 20%.
Try this large pdf: http://www.gpoaccess.gov/usbudget/fy11/pdf/hist.pdf (or, alternatively, the data are available as Excel files here: http://www.gpoaccess.gov/usbudget/fy10/hist.html
Page 21-23 of the pdf gives actual government outlays every year from 1901, and page 26-27 gives outlays in constant dollars staryting in 1940 (thus missing 1933-1940, alas).
ETA: Dollars as a % of GDP are also given on pages 24-25.
The red line in this graph shows federal government spending as a percentage of GNP from 1950 to the present.
It can be seen that money coming into the government has been pretty flat, while spending has increased. To fix this problem, some people say we should increase collections (blue line), while others say it’s a spending problem (red line).
Just as a note: I was reading off the red section of that graph, which is federal spending. The green part is state spending, the grey part is local spending.
This graph has different figures to the one I posted. It says federal spending has been well above 20% for a lot of the last few decades, and is more like 25% today. That sounds more accurate to me than the graph I posted. I wonder why they’re different?
Not sure. But here is the article it came from.
Note that this is just a blog, and the author may have a political bias. I admit haven’t scrutinized it for accuracy.