
50 Years Of Government Spending, In 1 Graph - mshafrir
http://www.npr.org/blogs/money/2012/05/14/152671813/50-years-of-government-spending-in-1-graph
======
sien
The other thing that would be good to see is the percentage of GDP that the
spending represents.

Here is one here:

[http://www.usgovernmentspending.com/spending_chart_1903_2010...](http://www.usgovernmentspending.com/spending_chart_1903_2010USp_13s1li011lcn_F0t_US_Government_Spending_As_Percent_Of_GDP)

~~~
_delirium
The most amazing thing I take away from that chart, having lived in both
Europe and the U.S., is how little the U.S. taxpayer gets for their money in
comparison, I'm guessing because spending crept up slowly without any real
planning. For example, the U.S., Canadian, and Norwegian governments each
spend about 40% of GDP, but somehow Norwegians and Canadians get a much
stronger set of social services (including state-provided healthcare and much
cheaper education) within the same budgetary level.

It seems U.S. spending has gotten to similar levels without actually having
any sort of solid planning, so taxpayers are left in the worst of both worlds:
40% of GDP spending, but somehow you still have to buy everything yourself
(like health insurance or college), because the state hasn't figured out how
to provide it for that price. There are some exceptions; e.g. healthcare for
the elderly is covered, and the interstate highway system is good. But not as
much as I would expect for that size budget.

~~~
adventureful
A big part of our problems are the calculations that were used to justify
Social Security and Medicare (over half our budget). Neither program was built
to last more than two generations. The politicians that created them didn't
care about that (FDR and LBJ), in typical intentional short-sightedness. Both
programs were designed to be flush early so they could be plundered. Instead
of having trillions sitting in a sovereign fund earning interest, we have a
blackhole of entitlement liabilities.

In other words, the biggest problem with our social systems is theft. The
money was used over two generations to buy votes.

edit: it's interesting to try to calculate it roughly, but, it seems fair to
estimate that the politicians have spent an inflation adjusted $30+ trillion
beyond their means over the last 70 years ($16 trillion public debt, plus the
money that should have been put aside and earning interest from SS and
Medicare etc).

~~~
parasubvert
That's just not true with regards to Social Security. 100 years of projected
life before dragging on other Federal finances and one major reform so far
(another will be needed) is usually the sign of a successful government
program. It's not in dire crisis: we will start to see it drag on other
government finances in 20 years, as FICA will only fund about 75% of payouts
once the trust fund is exhausted.

Medicare on the other hand is a different story. Costs are growing too high to
make it sustainable. But that doesn't have to do with the efficiency of the
program itself vs. other insurance companies - it's actually quite a bit
efficient than private insurers. The problem seems to be the broader U.S.
system of health cost/benefits compared to other countries. We spend more and
get less.

~~~
anamax
> It's not in dire crisis: we will start to see it drag on other government
> finances in 20 years,

It's actually a drag now, as it has been paying more in benefits than it
receives for the past few years.

Yes, I know about the bonds. Paying them back is a drag because they weren't
used to create profitable assets.

~~~
_delirium
That seems like a problem for the regular budget to sort out: Soc. Sec.
basically has the money it needs for some decades, but the rest of the budget
either needs significant cuts or tax hikes so that it can pay back Soc. Sec.
what it owes it.

I don't think it's an acceptable option to retroactively say that some of the
Soc. Sec. taxes won't be paid back to Soc. Sec., and just kept for the general
fund. If that happened, then it's basically been a regressive income tax all
along, contrary to Reagan's assurances in 1983 that he wasn't making a
regressive change to the tax code, because of the bonds. If that _is_ likely
to happen, then at least the regressiveness should be fixed ASAP by removing
the $110k cap, because the only justification for the cap is that the money is
earmarked for Social Security.

~~~
anamax
> That seems like a problem for the regular budget to sort out

I agree. My point is that the problem exists now.

> I don't think it's an acceptable option to retroactively say that some of
> the Soc. Sec. taxes won't be paid back to Soc. Sec.,

I didn't suggest default. I'm just pointing out that the "drag" has already
started.

> and just kept for the general fund. If that happened, then it's basically
> been a regressive income tax all along

It's not a regressive tax because of the payout is capped too.

In fact, it's actually a progressive tax because of the way that payout works.
The ROI for folks who pay the minimum is pretty good. The ROI for folks who
hit the cap is horrible.

That said, some subgroups do worse/better than others. The worst is probably
black men. They don't live long enough to get the payouts. I think that white
women are the big winners.

> If that is likely to happen, then at least the regressiveness should be
> fixed ASAP by removing the $110k cap, because the only justification for the
> cap is that the money is earmarked for Social Security.

Actually, the designers of SS put in the cap because they thought that it was
the best way to protect SS from political fights.

Are you planning to remove the benefits cap as well? If not, it's just another
tax and rich people are going to care. SS's designers wanted rich people to
ignore SS.

If you do remove the benefits cap, then you get to explain why Ross Perot gets
$400k/year in benefits.

I think that SS's designers got that part correct. The payout formula needs
some tweaking.

~~~
_delirium
Re: removing the cap, that was in the case, which is vaguely proposed on and
off, that Social Security will never get the money back from its mythical
"lockbox", and instead the money will be retroactively turned into just
general-treasury money. If it's just general-treasury money, then the Social
Security tax is a general-revenue tax (not one earmarked for Social Security
benefits), but as a general-revenue tax it's a regressive one.

If the money really _is_ going to be repaid to the Social Security system and
used exclusively for benefits, then I agree it's a different situation, more
of a quasi-retirement-account.

~~~
anamax
> but as a general-revenue tax it's a regressive one.

SS is not a general revenue tax - taxes don't have contribution-based payouts.

If you're suggesting that SS payouts should be completely means tested, you're
opening the biggest can of worms. The SS recipients that complete means
testing would most affect are among the most politically active people in
America.

When I was younger, I used to argue against SS and the like as old-people
welfare. I didn't see why my money should go to to folks who were better off
than me. My age-cohorts disagreed.

Soon the subsidies will start flowing my way....

~~~
_delirium
> SS is not a general revenue tax - taxes don't have contribution-based
> payouts.

Did you miss this part of my comment?

> in the case, which is vaguely proposed on and off, that Social Security will
> never get the money back from its mythical "lockbox", and instead the money
> will be retroactively turned into just general-treasury money

Especially in the last Social-Security-reform debate a few years ago, there
were serious proposals that the Social Security tax surplus notionally held in
bonds will _never_ be repaid to Social Security, and therefore reform
proposals should be made which allows SS to be solvent under the assumption
that it will never get its bonds repaid.

 _If that happens_ , a significant part of the past 20 years' Social-Security
tax money will not be used for SS payouts, but will be kept by the general
treasury. In _that case_ , SS will retroactively have been, in part, a
regressive general-revenue tax.

If 100% of the Soc. Sec. money collected is eventually used to pay Soc. Sec.
obligations (i.e. SS is able to call its bonds), then my argument doesn't
apply. I'm not confident that will happen, though.

------
tnuc
Does this account for the changes in how spending is reported?

Is all defense spending under defense? or is there a lot hidden under
education and health?

I have played with too many budgets to accept things like this at face value.

~~~
cpeterso
Good question. Does the "defense spending" category include the trillion
dollar wars in Iraq and Afghanistan? George W. Bush's administration
conveniently swept the wars' costs into a "supplemental" budget separate from
the DoD budget.

~~~
waterlesscloud
"The figures in the graph include veterans' benefits as well as funding for
current operations."

~~~
gruseom
That suggests that the off-budget wars were not included.

Edit: never mind. I was referring to what they call the "unfunded" wars under
GWB but the graph obviously doesn't include those years.

------
NHQ
The authors says

"Federal spending has grown roughly as fast as the overall economy over the
past 50 years."

And then immediately after that says spending climbed from 18% of GDP to 24%
of GDP, which is a 33% increase.

~~~
nnnnnnnn
There are many other mistakes. The author also says "Fifty years ago Medicare
and Medicaid didn't even exist, and federal spending on other health-related
services made up a tiny sliver of the whole"

This is only true because 50 years ago veteran's benefits and many other
related military benefits were part of the defense budget. In 2011 this
amounted to $141 billion dollars. Cite:
[http://en.wikipedia.org/wiki/United_States_federal_budget#Ot...](http://en.wikipedia.org/wiki/United_States_federal_budget#Other_spending)

This alone represents a false 20% reduction to the "Defense" budget, at the
expense of increasing the appearance of social services budgets. If one adds
up all defense related spending not by Federally published categories but by
_actual expenditures_ then the picture changes radically -- and it looks a lot
closer to the budgets of yesteryear.

------
smcl
Anyone care to explain how medicare + medicaid (which don't apply to everyone)
manage to consume 23.2% of the US budget - yet the UK's National Health
Service, which _does_ cover everyone, only takes up 10.7% of it's budget[1].
The NHS, for it's flaws, is starting to seem like a bargain.

[1]
[http://www.ukpublicspending.co.uk/uk_health_care_budget_2009...](http://www.ukpublicspending.co.uk/uk_health_care_budget_2009_1.html)

Update: i'm an idiot and read the "Public net debt" row instead (just skimmed
to the bottom row and presumed that'd be a sum). The actual percentage is
17.09% which is considerably higher than I originally had it, but still a
great deal less than the US.

------
_delirium
Interesting that, contrary to what I had assumed, social security is
completely flat in its budget share from 1987 to 2011.

~~~
asmithmd1
Yes, but it is just about to zoom up as the baby boomers start retiring over
the next 20 years. It is a double wammy to the budget because they will switch
from paying in to pulling out.

~~~
_delirium
True, though Reagan somewhat planned for that with the 1983 Social Security
tax hike, which was designed to pull in ~20 years of higher baby-boomer Soc.
Sec. tax revenue to pay for their retirements. Hence the huge surpluses Soc.
Sec. has been running for some years, to accumulate a few trillion out of
which to pay for their retirements (if it weren't for that, Soc. Sec. tax
could've been a lot lower over the past 20 years purely to break even year-to-
year).

------
SagelyGuru
Does the 'defense' figure include offense?

------
hansef
So basically: less defense, more insurance, less infrastructure and research.
This is the trifecta of basic public goods the federal government is well-
suited to provide. Would be nice to tip the scales more in favor
transportation infrastructure and basic research grants, with less spent on
boondoggle defense programs (<http://www.wired.com/dangerroom/tag/f-22/>) and
subsidizing out of control growth in health care costs vs. other first-world
nations ([http://www.washingtonpost.com/blogs/ezra-klein/post/why-
an-m...](http://www.washingtonpost.com/blogs/ezra-klein/post/why-an-mri-
costs-1080-in-america-and-280-in-france/2011/08/25/gIQAVHztoR_blog.html))
though.

------
aleyan
A more accurate description would have been 3 years of government spending in
1 graph. We have the US budget for each of those 50 years, then why throw out
47 data points and keep arbitrary 3?

This graph with it's hand picked years and tweens between the dates seems to
show a monotonically decreasing defense spending which is a very wrong way to
think about it. We have had a lull in defense spending after the end of the
Cold War, but the last 10 years have seen an increase of more than 50% in
dollar values of the defense budget.

I don't want to attribute malice to the creator of the graph for their
selection (and exclusion) of the data points, but I feel being manipulated.

------
panthera
And here's another graph of government spending effectiveness:

cato.org/images/testimony/coulson-2-9-11-2.jpg

Imagine if that were

\- Price vs. Hard Drive space, OR

\- Price vs. Computer Chip

We would be paying _more_ for slower computers!

Yet when the government spends, and produces outcomes like these, the cry is
always for "more funding."

To make this concrete, many people on HN are involved in startups.

If you showed prospective investors numbers like the kind in that graph -- for
something you produced -- you would be walking away without a check.

~~~
ajross
I'd feel better about that graph if it wasn't so horribly spun. The vertical
scale is showing a delta from the original value, not the value. It looks like
an exponential explosion in spending when it's actually about 3.5x since 1970.

Honestly, if I were an investor and a startup tried to sell me that chart, I'd
walk out of the room.

The broader point is valid, though. Education policy in the US sucks. But the
details matter a whole lot -- we're spending on the wrong things (tests,
security) and not on the things that are known to make a difference (e.g.
teacher salary -- make it competetive with other professions and you'll get
better teachers). It's far more complicated than the libertarian "Gov'mnt
spending bad, hur, hur, hur." line.

~~~
ekianjo
No need to ridicule libertarians like that. There are different kinds of
libertarians, different movements, and not all have such simple ways of
thinking. At least libertarians invite criticism in the field of inflated
government spendings.

~~~
mkr-hn
I thought libertarians were a fringe group of idiots until someone on HN said
they were libertarian while saying something sensible. It's been hard to fight
the habit of ignoring them. It doesn't help that the Koches and their
institute are cited in the stupid babbling of the more vocal ones.

~~~
ekianjo
Usually mass-media use the worst examples of libertarians to make fun of the
whole concept/idea behind it. That's a common fallacy used to fight different
kind of groups, when they are not mainstream and opposed to the current
"approved way of thinking".

EDIT: Hayek, Nobel Prize in Economy in 1974, is one of the most well-known
libertarians out there:
[http://www.nobelprize.org/nobel_prizes/economics/laureates/1...](http://www.nobelprize.org/nobel_prizes/economics/laureates/1974/hayek-
lecture.html)

His advices on Economy were notoriously NOT followed.

~~~
ajross
To be fair: the source of this discussion was a verifiably distortionist graph
produced by a very mainstream libertarian think tank. To my mind, you're
simply arguing the converse fallacy. The fact that there are smart people who
hold any given opinion doesn't mean that the group associated with that
opinion is worthy of praise.

Basically: Hayek being "right" about something doesn't make the Cato institute
"not true libertarians".

~~~
ekianjo
It's not just about being worthy of praise. I am just making the point that
"libertarian" is a too generic term to put everything and everyone in a single
bag. There are anarcho-libertarians, libertarians who support the idea of a
balance between government and private investment, and many other variations.

I think the only generic you can say about libertarians is that : they care
about freedom of property and consider government intervention in private
affairs with criticism. Beyond this point, the commonalities disappear, and
there is a wider range of opinions among libertarians than in any other
political group out there. There is no real "dogma", while Von Mises and Hayek
are more or less recognized as Thought leaders for some of them.

I did not claim, by the way, that Hayek was "right" about anything, I just
wanted to show one of the figureheads of some parts of the movement. Getting a
Nobel Prize does not mean anything to me, and I personally feel very strongly
that the recent Economy Nobel Prize Jo Stiglitz does not know what he is
talking about (he's just an old school Keynesian, and even Keynes himsel
admitted in being wrong later in his life). Stiglitz has a clear political
agenda that has nothing to do with actual economic sense.

------
codemac
"Everything else" is a bit big, and seeing the trends over time is far more
interesting than at 25 year intervals.

------
artsrc
Nominal interest is different than real interest. Inflation reduces the real
size of debt. Inflation was higher in the 80's.

------
ktizo
Should be titled '3 years of government spending in one graph' as it seems to
completely fail in putting the figures into context by skipping intervening
years, so we have no idea from this whether this is representative, or cherry
picked for effect.

------
adviceonly
Unfortunately this graph primarily just shows that government handouts to
citizens in the form of safety net programs, medicare, and medicaid have gone
up in percentage, that defense has gone down in percentage, and that we don't
spend enough (in my opinion) on public transportation- but it only looks at
three years!

Instead, look at the Peter G. Peterson Foundation's graphs, like this one of
our debt and projected debt: [http://www.pgpf.org/Chart-Archive/0024_federal-
debt-full.asp...](http://www.pgpf.org/Chart-Archive/0024_federal-debt-
full.aspx)

The Peterson foundation used to be an NPR donor. I don't know whether they
still are.

~~~
ekianjo
I am not sure exactly at what level you wish there would be more spending on
public transportation, but spending money in that field could be a big waste
of cash in the US. It's way too big and too decentralized. It makes sense in
some countries (in Japan, for example, all cities are on the coast because
nobody builds stuff in the mountains, so it's easy to connect the dots), but
public transportation would not work well outside of a few big cities in North
America.

Even in France, the bullet trains lines cost way too much versus their planned
profits. Some will not be profitable for another 20-30 years! And that's
assuming that, by then, it's still the best way to get from A to B. It's all
about getting votes in the end, it does not make economic sense at all.

~~~
delackner
You have made a few simple basic errors of data that lead to some very
incorrect conclusions.

The bulk of the US population live in areas that have population densities at
or even sometimes (NYC) above European levels. The entire state of california
(not exactly high density at all, given the bulk of the state is just open
space) has an average population density slightly higher than Spain, a country
that managed to build a national High speed rail network.

The entire eastern sea-board is at roughly european density levels as well. No
one is suggesting we build a bullet train that goes to North Dakota.

As for "not being profitable for another 20-30 years", you are arguing from a
very short-term mindset about national infrastructure, but also you are pre-
assuming that infrastructure should be directly profitable. This is not a
commonly agreed idea, rather there is fierce disagreement between fiscal
conservatives who think the government shouldn't do ANYTHING, and those (like
most of europe) who believe the government should undertake large "public-
good" projects precisely because they are not directly profitable, but they
are PUBLIC GOODS.

Universal health care is also "not profitable" directly, but the benefit to
society of having everyone live decades longer is massive increased economic
output, to say nothing of increased quality of life.

The network effect of having efficient rail transportation balloons the entire
economy. This is why governments pay for big infrastructure: everyone benefits
and the direct revenue and direct costs are high enough to be uninteresting
for investors.

------
woodchuck64
Reality has a liberal bias.

~~~
J3L2404
Time has a liberal bias. Last generation's liberal is this generation's
moderate.

~~~
btilly
Not true. A right wing _lower taxes_ point of view 55 years ago was to drop
the top taxes on rich people from over 90% to about 70%. A right wing _lower
taxes_ point of view now is to drop taxes on rich people from 15% to 10%. And
anyone who thinks that having more tax brackets with much higher top tax rates
is viewed as a radical.

