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Thread: Federal government did not grow from the fifties?

  1. #1

    Question Federal government did not grow from the fifties?

    Look at this chart please.

    http://www.usgovernmentspending.com/...s1li011mcn_F0f

    Spending was 21% of GDP at 1961 and at 21% of GDP in 2008 (before the recession).

    Can you explain this? I thought the federal government grew enormously in the last decades.



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  3. #2

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    The blip in the '50's was the Korean War. (Police Action in euphemism-speak )
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  4. #3

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    I think this shows just how much of what the federal government appropriates it doesn't spend. Instead, it takes its cut and gives the rest to the states to spend--if those states jump through all the hoops.

    Is this more like what you expected? http://www.usgovernmentspending.com/...s1li011mcn_F0t
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  5. #4

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    Quote Originally Posted by eugenekop View Post
    Look at this chart please.

    http://www.usgovernmentspending.com/...s1li011mcn_F0f

    Spending was 21% of GDP at 1961 and at 21% of GDP in 2008 (before the recession).

    Can you explain this? I thought the federal government grew enormously in the last decades.
    Any numbers based on GDP are meaningless and inaccurate. Govt spending makes up a GDP component so the bigger govt gets, the bigger GDP gets... figuring percentages off that figure is a bad idea, thats why govt uses it.. Try GNP instead.
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  6. #5

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    Quote Originally Posted by Mike Mitrosky View Post
    Any numbers based on GDP are meaningless and inaccurate. Govt spending makes up a GDP component so the bigger govt gets, the bigger GDP gets... figuring percentages off that figure is a bad idea, thats why govt uses it.. Try GNP instead.
    I second this. Statists love to quote GDP numbers in that fashion. Honest people need to undetstand that when looking at past numbers, the government is always going to change the accounting to make the case for.............more government.

    This is also done with tax rates. The rich used to pay 99% tax rate! Or some very high number, but the tax code has change a billion times since then, so it's almost impossible to compare the time periods.

  7. #6

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    Quote Originally Posted by acptulsa View Post
    I think this shows just how much of what the federal government appropriates it doesn't spend. Instead, it takes its cut and gives the rest to the states to spend--if those states jump through all the hoops.

    Is this more like what you expected? http://www.usgovernmentspending.com/...s1li011mcn_F0t
    Well, even with total spending it goes from 30% in 1960 to 32% in 2000.

  8. #7

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    Quote Originally Posted by eugenekop View Post
    Well, even with total spending it goes from 30% in 1960 to 32% in 2000.
    And look at how well the economy did during that dip leading up to 2000, too! Which not only goes back to what was said earlier about GDP, but says something about the folly of trying to legislate and regulate one's way out of a depression.
    Quote Originally Posted by Calvin Coolidge View Post
    There is danger of disappointment and disaster unless there be a wider comprehension of the limitations of the law. The attempt to regulate, control, and prescribe all manner of conduct and social relations is very old. It was always the practice of primitive peoples.
    Quote Originally Posted by Will Rogers View Post
    It's a mighty hard thing to tell nowadays whether an idea is revolutionary, or downright conservative.

  9. #8

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    Compare the consumption of the 1950s vs 2012 as part of the GDP. So you need to check your assumptions before you analyze. GDP is not a great measuring stick.

  10. #9
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    Quote Originally Posted by cubical View Post
    Compare the consumption of the 1950s vs 2012 as part of the GDP. So you need to check your assumptions before you analyze. GDP is not a great measuring stick.
    OK. Let's take a look.

    Personal Consumption Expenditures (PCE)
    as Share of Gross Domestic Product (GDP)



    http://www.stlouisfed.org/publicatio...icles/?id=2201
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  11. #10

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    The chart that shows how much government grew is the one that measures its spending in $ bln 2005.
    http://www.usgovernmentspending.com/...s1li011mcn_F0f

    Since GDP has grown faster than inflation, then for the government to stay the same size, its share of the GDP would have to decrease over time.
    Last edited by erowe1; 12-01-2012 at 12:30 PM.
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  12. #11

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    Quote Originally Posted by erowe1 View Post
    The chart that shows how much government grew is the one that measures its spending in $ bln 2005.
    http://www.usgovernmentspending.com/...s1li011mcn_F0f

    Since GDP has grown faster than inflation, then for the government to stay the same size, its share of the GDP would have to decrease over time.
    You forget population growth. Perhaps you mean this graph: http://www.usgovernmentspending.com/...s1li011mcn_F0f

    Though I don't understand why this graph is so different from the GDP graph

  13. #12

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    Quote Originally Posted by Zippyjuan View Post
    OK. Let's take a look.

    Personal Consumption Expenditures (PCE)
    as Share of Gross Domestic Product (GDP)



    http://www.stlouisfed.org/publicatio...icles/?id=2201
    I don't understand how is this related to government spending

  14. #13

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    Quote Originally Posted by eugenekop View Post
    You forget population growth. Perhaps you mean this graph: http://www.usgovernmentspending.com/...s1li011mcn_F0f

    Though I don't understand why this graph is so different from the GDP graph
    You're right that it's better to use $ bln 2005 per capita.

    The reason it's so different is that GDP has grown faster than inflation and population growth combined.
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    Quote Originally Posted by eugenekop View Post
    I don't understand how is this related to government spending
    I believe that Cubical was trying to make the point that GDP was rising because government spending was rising (government spending is part of GDP hence the suggestion to see if consumer spending was actualy rising- the other major component of GDP). Seems both were rising. Government spending can rise and its percentage of GDP stay the same if GDP rises at the same rate that government spending increases. My appoligies if I misrepresent the point he was trying to make.
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  16. #15

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    Quote Originally Posted by Zippyjuan View Post
    I believe that Cubical was trying to make the point that GDP was rising because government spending was rising (government spending is part of GDP hence the suggestion to see if consumer spending was actualy rising- the other major component of GDP). Seems both were rising. Government spending can rise and its percentage of GDP stay the same if GDP rises at the same rate that government spending increases. My appoligies if I misrepresent the point he was trying to make.
    Yeah, mathematically, if federal spending is the same percent of GDP at two different points in time, then it must also be the case that federal spending is the same percent of (GDP-federal spending) at those same two points.
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