Less than 200 Federal employees per billion dollars of Real GDP

"I'm pretty sure that by 'government' they mean all levels of government, not just Federal." That's what I said yesterday, showing this graph of the decline in the size of government relative to the size of the economy.

Graph #1

But I was only "pretty sure" they meant all levels of government. Because I hadn't seen it yet. So I went looking. And I found a series named All Employees: Government: Federal which tells me that the series named All Employees: Government counts employees of state and local governments in addition to Federal.

To actually see it, I looked at "Government: Federal" as a percent of "Government":

Graph #2: Federal as a Share of Government Employees

Half of all government employees during the Second World War were Federal employees. 50 percent (and that's not counting military personnel). Something less than 40% were Federal employees at the time of the Korean war. From there, the number continued to drop: 35% around 1954, 30% around 1957, then lower yet; and since the latter 1990s, less than 15 percent.

The first graph shows that the number of all government employees fell, relative to the size of our economy. The second graph shows that the number of Federal government employees fell as a share of all government employees. So I'm thinking that the number of Federal government employees must have fallen a lot more, relative to the size of our economy, more than the fall we saw on the first graph.

The number of Federal employees relative to the size of our economy:

Graph #3

The graph peaks near the 1.5 level in the early 1940s. That's about half the level shown on Graph #1 around that date. 50 percent: That agrees with what we saw on Graph #2.

It peaks again, just above the 1.0 level in 1952, during the Korean war. From there, it falls below the 1.0 level and continues to drop.

On Graph #1, "below the 1.0 level" puts us off the chart: off the bottom of the chart. For 1953 and after, everything visible on Graph #1 is state and local. Federal employment, between 1.0 and zero, is lost somewhere in the blue border that runs across the bottom of that graph.

On Graph #3, the most recent level shows that the ratio is less than 0.2. That's 0.2 times a thousand people, or something less than 200 Federal employees per billion dollars of Real GDP. That's what the graph shows. (Read the Y-axis label if you don't believe me.)

To be sure, that doesn't include the U.S. Military and the CIA and the NSA and all. But it is less than 200 Federal employees per billion dollars of output, compared to 400 in Reagan's time, 600 in Nixon's time, and 800 under President Eisenhower.