Monday, January 25, 2016

Government Share of GDP

Yesterday we looked at GDP and components. I said it looked like the government's share of GDP had been falling since 1967. Another look:

Graph #1: Government Share of GDP
Decline from 1967 to 1998. Thirty years.

But "Government Consumption Expenditures and Gross Investment" is only one measure of government spending. Another measure I've run across is "Federal Government: Current Expenditures". Here's a comparison of the two:

Graph #2: Two Measures of Government Spending
They look pretty close until the crisis. Here's the red line as a percent of the blue:

Graph #3: Federal Government: Current Expenditures as a Percent of
Government Consumption Expenditures and Gross Investment
Oh! Not as close as I thought. Especially in the 1950s and '60s.

I need to see another comparison. I want to bring forward Graph #1 and update it by adding the red line, current expenditures as a percent of GDP:

Graph #4: Government Spending as a Percent of GDP, Two Measures
Well, the blue line shows decrease from 1967 to 1998. But the red line shows increase from 1965 to 1982.

Apparently, one can argue either way about government spending.

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