Friday, August 28, 2009

Chart of the Day - Government spending since 1870

Today's charts show US Government spending in three contexts. The first chart shows various countries' government spending as a share of GDP roughly over the last 130 years (don't try to trace countries, just note the trend; US highlighted in red):

The second chart shows the same info for fewer countries:

The third chart shows the US government spending without being smoothed out. Here we see the peaks during the two world wars, and other minor increases and decreases in the government spending:

What do you think? To me what stands out is the following:
  • the world-wide sustained trend of increasing government spending is noteworthy even if unfortunate
  • the current (2009) increase in the government spending compares well with the increase during the early part of the Great Depression. Then spending about doubled from about 10% of GDP to 20% of GDP. Now spending is again increasing about 10 percentage points from 35% to 45%.
If history is any guide - don't hold your breath for trend reversal.
I took the data for charts come from Tanzi's book "Public Spending in the 20th century" for the first two charts, and from usgovernmentspending.com for the second chart.

What do you think upon observing the charts?

No comments:

Post a Comment