Look at this chart please.
http://www.usgovernmentspending.com/spending_chart_1903_2012USp_13s1li011mcn_F0f
Spending was 20% of GDP both at 1960 and at 2007 (before the recession).
Can you explain it?
Who gives a damn about GDP. You're crazy if you think the government didn't grow in that timeframe.
It's gov spending as a percent of GDP. In that range, spending grew from ~19% to the current 24%. That's actually a lot of money, one in every 20 dollars. And since GDP has grown massively since 1960, it's also a whole lot more money.
So, not only has government spending grown, but it's increasingly eaten up private dollars.
1 in 4 dollars being spent by the government is unacceptable. Anyone over 0 in 0 is unacceptable.
I wonder what Greece's figure was before they collapsed?
It's fairly true in terms of federal spending. But remember that state and local and state have also grown. This is also GDP we're talking about. A one percent increase means one out of every hundred dollars in the entire economy which is being spent is now being directly influenced by an already massive force
Here's state and local spending as a % of GDP since 1950:
So, total gov spending, roughly up a few %'s since 1990. Mostly fed growth after spiking in 2008.
In 1961, federal spending was 21% of GDP, in 2000 it was 18% of GDP. I really don't understand how is this possible.
Remember that the Cold War consumed huge amount of resources, partially through the desire for "War Keynesianism" but also just general defense stuff. The feds were also scaling up welfare programs around that time and there was a recession around 1960. In 2000 we were in peace time and at the end of a boom.
1961 was at the end of Eisenhower's term, and according to Ivan Eland he restrained spending, especially defense spending, and the GDP grew very significantly at that time.
It is also unclear why federal debt grew so much from the 80s if the federal government spending didn't grow.
Expenditure: http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&language=en&pcode=tec00023&plugin=1
And also revenues, just in case: http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&language=en&pcode=tec00021&plugin=1
If an economy produces nothing more than 10 bananas and government takes 1 banana, government "spending" would be 10% of GDP. If that economy dramatically increased its production to 10 million bananas and government takes 1 million bananas, government "spending" would still be 10% of GDP. However, you wouldn't really say that government was eating the same number of bananas anymore.
@Andris
Dang, those are scary numbers. Greece at 51.6%, most of the Eurozone above 40%. US politicians must feel like they have a lot of room to grow >_>
I suppose with socialized healthcare we can expect American expenditures to rise considerably, probably upwards of 30-35% of GDP, more in line with Euro figures.
Without the "new" countries, it would be more than 50% on average.
The scariest thing is, people here lament the government for not spending as much as in "more advanced" members of the EU.
Anenome,
We're going to see massive hikes in government spending unless something drastically changes. Not because of increases in government scope or programs, but just because welfare and entitlement programs are going to increase dramatically (and healthcare costs are just going to keep rising) through social security and Medicare as the baby boomers retire. The scariest number in the world is America's unfunded liabilities (see bottom line).
It's even more terrifying that this number could be 50% off and still be 4 times the totality of current GDP.
Edit
Also, something I never hear anyone talking about is the interest rate. If the government doesn't sort things out (lol) then when (if) interest rates ever go up then as the government takes out more loans on the debt then the interest payments on top of one another will be out of control and consume ever more GDP... And you know what happens when you have to take out debt to pay off debt.
Another way to look at this is in terms of the size of the workforce. If the government just took a static amount of taxes and did nothing with them it wouldn't have much of an economic impact regardless of the percentage, market prices would just adjust while the entire population is still available as a private workforce to produce the goods it desires, but the more people government employs the fewer people are available to produce goods to satisfy peoples desires.
Side question: What is the huge decline in federal and local workers in 2001, that looks like about 4 million people? I assume it has something to do with September 11, but I would expect a spike, not a dip.
Re: 2001 gov layoffs, only thing I can think of is the Census of 2000. They probably hired a couple million people to go door to door. You can see a similar bump in '90 and '80.
As for Greece, I remember reading figures that 25% of the people in the country were employed by the government there.
Government jobs were the highest prestige jobs you could have, not only there but in most European countries, probably most countries period.
Running a government is quite the racket :P literally.