My good friend, Jimmy, has a great post on his blog. The title alone makes me weep for joy: “Take the Money Out of Politics: Reduce the Size of Government”. I’m happy because Jimmy understands what so many others don’t seem to: Government is too big. Every dollar that flows out of our paycheck and into the governments coffers is almost always a dollar wasted.
Jimmy’s point is that the size of the government hasn’t really changed at all over the past 60 years or so. However, when you look at the small changes, Democrats tend to have more in government tax receipts, as a percentage of GDP, than Republicans.
Unfortunately, I’m not sure about the implications of that conclusion. It would be nice (at least for us conservatives) to say that when liberals are in power, taxes are high, and when conservatives are in power, taxes are low.
The problem is in the measurement. You see tax receipts vary based on a lot of things. There’s the tax rate, imposed by our Federal Government. Also, as incomes rise, so do tax receipts. So, saying that increased tax receipts are bad, or a sign of bad government, is a difficult argument to make.
My favorite way to measure the size of the government has always been government spending. It’s controlled purely by the government and it accounts for deficit spending. Additionally, you can show the effects of crowding out by plotting government spending and GDP together.
But for my purpose today, I re-did Jimmy’s chart (in a much less attractive way, I might add) using government spending as a percentage of GDP in Year 2000 dollars. Here’s the result:
Here are, for me, the highlights:
- Almost every president since 1960 has jacked up spending at the end of their term. Why? Who knows, but perhaps to build a legacy and pave the way for the next member of their party to get elected?
- The only two exceptions: Reagan and Clinton. I’ve always said Clinton was a good president but a bad person. I still stand by that. Anybody who shuts the government down for a week has a lot of stock in my book. And, of course, Reagan was the man.
- FDR/Truman had government spending out the wazoo! Part of that was WWII. That puts into perspective the money we’re spending on the Iraq war, doesn’t it?
- Government spending was trending swiftly downward…until GW stepped in. For all his talk in the 2000 campaign about low government spending and no nation building, he sure has turned out to be full of it, huh?
- That said, we’re still nowhere near the peak we had with Reagan. That cold war sure cost a lot, but the spending also brought quite a bit of prosperity with it, as the 80′s were a great time for almost everybody.
- The two Democratic presidents since 1968 have both seen drops in government spending during their tenures. Now, I’m morally opposed to what the Democratic party tries to do, but that’s pretty cool. I wonder why that is?
- Actually, one reason for the above two bullets could be that GDP was fluctuating. Since the first few years of a presidency are heavily effected by the lag from the previous president, it seems that Reagan could have been suffering from mistakes Carter made. In the same vein, Clinton could have been benefiting from the good decisions of the Reagan/Bush years. Maybe Jimmy will tackle that one…
Anyway, to me, this methodology better gets at the heart of the question, how big is the government.
I totally agree. It would be interesting to do that analysis and see what it looks like. Maybe if you move out here we can do it!
Very insightful m. If it had occurred to me, I probably would have gone with the spending definition of government size, rather than the tax collecting definition. It is very interesting, though, to contrast the differences in the two methodologies. Oh, that I didn’t have a real job and could investigate this more fully. I try to simplify things that realy are anything but simple; there are so many factors at work: tax receipts, government spending, defecits, surpluses, and (biggest and most complicated of all) GDP growth. At least we can agree that no matter how you look at it, our present government is too big.