The Most Depressing Government Graph
Brother, can you spare $11,000?
There is no one picture that can capture the inexorable rise and reach of Leviathan, but if you had to pick just one, the amount of money spent in the name of each citizen has several merits.
Why is spending important? Each dollar spent is a dollar taken from a citizen (living or future), or created from vapor. Each requires management and an apparatus for agreement, acquiescence, and distribution between citizens and government. Thus the more that is spent, the larger the influence of the government doing the spending.
Up, Up & Away!
If the federal government were as small as it was in 1900, it would today spend the same $180 per citizen as it did then. Given population growth, this would imply a current budget of around $59 billion. The actual budget is $3.6 trillion, which is sixty times higher. Customs duties alone would have paid for a good chunk of the $59 billion. And there would have been no need of an income tax.
The government is now sixty times more intrusive, sixty times more bureaucratic and Byzantine, sixty times more pervasive. The trend in spending increased fifty-percent over the last decade. It shows no sign of stopping.
Your might say, “It doesn’t matter what the government spends as long as it keeps pace with economy as measured by the Gross Domestic Product.” Yet the government spent at the rate of 3% of the GDP in 1900, soaring to 21% now. The shape of that curve is not much different than the spending per capita picture.
Next you might say, “Sure, the government was small in 1900. That’s because X wasn’t around.” “X” will be your favorite redistribution program, which you see as necessary. Yet every redistribution program is claimed to be absolutely necessary by somebody. That includes not just “entitlements” that we’ve paid something into, but programs that haven’t yet been implemented. Threaten any with defunding, and the program’s advocates start making sounds like a college student being disagreed with.
The general picture
There are lessons in the curve’s shape. The two early peaks, for you Gender Studies graduates, were the results of World War I and its exciting sequel. President Wilson’s (D) goading succeeded finally in bringing America into The Great War, but only at its finale, so spending was limited. F.D.R. (D) ensured full participation in WWII; spending ramped up to $8,246 per citizen in 1944. Recall these are modern-day dollars.
Our country recovered from the spending spree, and government shrank — but only momentarily. In 1948 it began its relentless rise, punctuated by the Korean (Harry Truman, D) and Vietnamese (Lyndon Johnson, D) interludes. However, it would not again reach WWII-levels until George H.W. Bush (R) in 1990 brought us Iraq I.
Think of it this way. Under Bush Senior, it was as if the entire country were mobilized as it did in WWII, at least in the sense of government insinuating its tentacles into people’s lives. Spending had justifiable causes in WWII: We were attacked. There was no external threat in Bush Senior’s time. Instead, arguments for spending increases came from within, from the conviction that only America could and should police the world.
There was a minor respite at the end of Bill Clinton’s (D) second term and into Bush Junior’s (R) first, but then came Iraq II and Afghanistan, whose effects are still felt. Finally, The One (D) slouched his way to D.C., and the spending river widened into the “stimulus” cataract. Trump (R?) has not proposed any real cuts in spending.
The capital “D”s and “R”s are included only to show that party affiliation means little when it comes to making war or in creating new ways to spend. Who is the majority in the Senate and House also makes little difference.
Even though all know what more spending means, the call is always for still more spending, more programs, more regulation, more federal laws. The call comes from citizens as much as it does from government.
The End of Increases
The economist Herbert Stein said, “If something cannot go on forever, it will stop.” Increases in government spending cannot go on forever. The trick is to figure out when they will stop.
A pretty good marker of government failure might be the point at which half or more of the households work the full year just to pay the State. (We’re not considering how the government continuously hopes and prays future generations pay for this generation’s debt.) Crudely, median-sized households still have $59,000 – $33,000 = $26,000 “left over.” Households (of size three) that make $33,000 or less have nothing left or are in hock, so to speak. That missing money has to be made up by those making more than $33,000.
The point we’re looking for is when half the country has nothing left or less, a point where the other half must make up the difference. It’s then the contrast between upper and lower classes becomes stark and the “gap” between them accelerates. Raw extrapolations from the data (always a dangerous move) shows we reach this “inflection” point in about 2050.
Of course, I may be wrong. The government may see sense and return to pre-WWI levels of spending and influence. Right?