What's the Best Way to Measure Govt Spending?

Lots of options.

It can't just be the actual $$, correct? Obviously we're spending more today than , say, 1927.

How should we measure it in order to compare eras/presidents?

IMO % of GDP is the best method.

Just like at home. You base your morgage/rent, car payment, etc on your income.

Originally Posted by coldweatherfan

IMO % of GDP is the best method.

Just like at home. You base your morgage/rent, car payment, etc on your income.

Seems logical. I read that spending in 2011 was 25.3% of GDP.

Originally Posted by Clyde

Seems logical. I read that spending in 2011 was 25.3% of GDP.

Seems like historical average has hovered around 20%. If we were at 20% now we wouldn't have the debt situation we have.

Congress (until 2009) set budgets. And when Presidents needed more money they needed Congress's approval. So can we measure by Congresses first?

With a speedometer?

Here is the 'big picture'....

Originally Posted by coldweatherfan

Seems like historical average has hovered around 20%. If we were at 20% now we wouldn't have the debt situation we have.

I read an article that said 18% is the number we always hear but the author broke down further.

1901-1930 averaged about 3.5%.
46% during WWII
First 130 years for the country averaged 2.5% .

Average from 1971 to 2009 was 20.6%.

Originally Posted by Clyde

I read an article that said 18% is the number we always hear but the author broke down further.

1901-1930 averaged about 3.5%.
46% during WWII
First 130 years for the country averaged 2.5% .

http://static5.businessinsider.com/i...ent-of-gdp.jpg

President Reagan averaged about 22% over his 8 years.

Originally Posted by Bluegrasscard

http://static5.businessinsider.com/i...ent-of-gdp.jpg

That is one steep graph the past couple years.

Originally Posted by Clyde

President Reagan averaged about 22% over his 8 years.

Reagan's congress averaged about 22%, but to be fair Reagan wasn't all that concerned about spending either.

However, revenue increased significantly under Reagan.

Originally Posted by coldweatherfan

IMO % of GDP is the best method.

Just like at home. You base your morgage/rent, car payment, etc on your income.

Originally Posted by coldweatherfan

Reagan's congress averaged about 22%, but to be fair Reagan wasn't all that concerned about spending either.

However, revenue increased significantly under Reagan.

What changed?

Originally Posted by Clyde

What changed?

I think 22% is too high of an average. I think during slow times 22% is ok but it needs to return back closer to 20%.

A lot has changed, both in and out of government.

I think our government (both sides) just assumed that our GDP would continue to grow forever and ever at the rates it was growing, so the baseline got bigger every year automatically. The spending % started increasing badly during the Bush years and then turned even higher under Obama.

At some point our government started created an anti-manufacturing environment, which helped contribute to the offshoring of jobs. Over regulating and IMO over taxing.

But companies/investors/millionaires, whatever you want to call them, also got greedier.

In the 80's the average exec made about 30 times what the hourly work force made. Now it's more than 200 times.

They have squeezed every dollar out of every place they can (which is smart business) but I do feel a company has some obligation to their employees just as the employees have an obligation to the company.

But the shipping of jobs out of the country has got to stop. If the American people don't have enough income to buy the goods and services, it's a recipe for a long slow death that is beginning to accelerate.

I don't know what the answer is to the greed factor, but I know you can't regulate it. The more you regulate it the more people will squeeze to keep you from getting it. Hence oversees investment and exporting of jobs. The government trying to redistribute wealth does not work. This is the land of equal opportunity not the land of equal outcome.

So that leaves government. We have to create an environment that makes it better to invest here than in Indonesia, Singapor, Mexico, etc

If you want to increase spending you have to increase revenue.

I am not opposed to a moderate tax increase if there are real spending cuts to go with it. However, I do not support any tax increase that does not coincide with cutting spending.

Re: GDP Growth there are some that say we are simply not going to be able to match historical growth in this country any more. This book is sort of wonk-ish and filled with graphs and charts but the message is that we should change our expectations as to growth.

Richard Heinberg | The End of Growth

Re: GDP Growth there are some that say we are simply not going to be able to match historical growth in this country any more. This book is sort of wonk-ish and filled with graphs and charts but the message is that we should change our expectations as to growth.

Richard Heinberg | The End of Growth

Originally Posted by Clyde

Re: GDP Growth there are some that say we are simply not going to be able to match historical growth in this country any more. This book is sort of wonk-ish and filled with graphs and charts but the message is that we should change our expectations as to growth.

Richard Heinberg | The End of Growth

That may be true. But if I'm not mistaken, the world market as a whole is growing signicantly. We consuming as much or more than ever, but we are contributing less than ever. Our growth may never reach what it once was, but it doesn't have to be as bad as it is.

Originally Posted by coldweatherfan

I think 22% is too high of an average. I think during slow times 22% is ok but it needs to return back closer to 20%.

A lot has changed, both in and out of government.

I think our government (both sides) just assumed that our GDP would continue to grow forever and ever at the rates it was growing, so the baseline got bigger every year automatically. The spending % started increasing badly during the Bush years and then turned even higher under Obama.

At some point our government started created an anti-manufacturing environment, which helped contribute to the offshoring of jobs. Over regulating and IMO over taxing.

But companies/investors/millionaires, whatever you want to call them, also got greedier.

In the 80's the average exec made about 30 times what the hourly work force made. Now it's more than 200 times.

They have squeezed every dollar out of every place they can (which is smart business) but I do feel a company has some obligation to their employees just as the employees have an obligation to the company.

But the shipping of jobs out of the country has got to stop. If the American people don't have enough income to buy the goods and services, it's a recipe for a long slow death that is beginning to accelerate.

I don't know what the answer is to the greed factor, but I know you can't regulate it. The more you regulate it the more people will squeeze to keep you from getting it. Hence oversees investment and exporting of jobs. The government trying to redistribute wealth does not work. This is the land of equal opportunity not the land of equal outcome.

So that leaves government. We have to create an environment that makes it better to invest here than in Indonesia, Singapor, Mexico, etc

If you want to increase spending you have to increase revenue.

I am not opposed to a moderate tax increase if there are real spending cuts to go with it. However, I do not support any tax increase that does not coincide with cutting spending.

Had our government (Bush and Obama) not provided a safety net for the greedy, in the form of bail outs, greed would have been checked by the system naturally. It would not have been fun. It would have hurt like hell, but the greedy would have taken a major blow and the results long term. The survivors would have been those who understand the principles you espouse and we'd all be better off for it, in the long run.

Originally Posted by swamprat

Had our government (Bush and Obama) not provided a safety net for the greedy, in the form of bail outs, greed would have been checked by the system naturally. It would not have been fun. It would have hurt like hell, but the greedy would have taken a major blow and the results long term. The survivors would have been those who understand the principles you espouse and we'd all be better off for it, in the long run.

A lot of truth in what you say. I'm all in favor of letting market forces do their job. I think it's healthy. Corrections are necessary, and they work best without government interference. I was not in favor of the bailouts.

Originally Posted by Clyde

I read an article that said 18% is the number we always hear but the author broke down further.

1901-1930 averaged about 3.5%.
46% during WWII
First 130 years for the country averaged 2.5% .

Average from 1971 to 2009 was 20.6%.

Entitlements...