Michael Perkins

The "explosion" of federal government spending is a hot topic in recent political debate, so I decided to take a close look at the Office of Management and Budget data to get a better understanding of the issue. The chart below shows federal fiscal year outlays from 1940 to 2009. Move your cursor over the line to see the exact numbers for any year.



First, note that the dramatic increase in 2009, relative to the increases in previous years, is due to roughly $345 billion in TARP and stimulus bill expenditures. If we remove these one-time expenses, we get something closer to George W. Bush's original $3.1 trillion 2009 budget. While this is a large number by any measure, it is certainly more in line with the spending increases of previous years.

Even if we look at 2009 as an anomaly, the chart still seems to show explosive growth over the last 40 years. What the chart fails to show, however, is that the U.S. economy has grown at roughly the same rate as federal spending. If we plot federal spending as a percentage of GDP, we get the chart below.



With the exception of the anomalous jump in 2009, federal spending has hovered around 20% of GDP since the early 1950s. Though it went as high as 23.5% during the Reagan years, it fell back below 20% during the Clinton administration. While we can have a legitimate debate about how much of GDP we should invest in the federal government, it is clear that the growth in federal spending as a percentage of our economy as a whole has been relatively flat for the last 60 years.

What has not been flat for the last 60 years is our unwillingness to fund this spending through taxes. The following chart, which plots both outlays and receipts since 1940, shows that with the exception of four years during the Clinton administration, we have been unwilling to properly fund our expenditures. Of course, this is the source of the current $13 trillion U.S. debt.



This table below shows which administration was responsible for each fiscal year budget. I will leave it as an exercise to the reader to sort out how well the data conform to the political rhetoric from each side.

President	Fiscal Year Budgets
Franklin Roosevelt (D)	1934 - 1946
Harry Truman (D)	1947 - 1953
Dwight Eisenhower (R)	1954 - 1961
John Kennedy (D)	1962 - 1963
Lyndon Johnson (D)	1964 - 1969
Richard Nixon (R)	1970 - 1974
Gerald Ford (R)	1975 - 1977
Jimmy Carter (D)	1978 - 1981
Ronald Reagan (R)	1982 - 1989
George H. W. Bush (R)	1990 - 1993
Bill Clinton (D)	1994 - 2001
George W. Bush (R)	2002 - 2009

See Also:
Taxes at Lowest Level in 59 Years