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John Adams Blog

The blog of The Antient and Honourable John Adams Society, Minnesota's Conservative Debating Society www.johnadamssociety.org

Monday, April 03, 2006


As I said in my post below spending has increased relative to the late 1990s, but has declined relative to 1994.

This USA Today article makes the same point about the late 1990s:

The federal government is currently spending 20.8 cents of every $1 the
economy generates, up from 18.5 cents in 2001, White House budget documents show. That's the most rapid growth during one administration since Franklin Roosevelt.

The problem with this post is that it uses "the low point" to make an argument. Granted you can fool some investors in arguing that a stock has increased 100% in the past year by citing the high vs the low, but most know that its almost impossible to buy into the all time lows and sell at the all time highs.

The low point in 2000-2001 was at the top of the business cycle. It ignores the fact that we also went into recession in 2001, and that there was a ridiculous and unsustainable boom year in 2000. Further, this increased spending should be compared to other periods. For example, in 1994 we were spending 21.75%. In the 1980s we were up near 23%. Further, to be fair with our comparisons, the spending increase that occurred under Roosevelt went up more than 500% from 1941-1944.

While I agree with the author's point that spending is too high, the media should at least deliver the facts in a fair and reasoned manner. (maybe on another planet!)

UPDATE: I revisted this and tried to replicate USA Today's claim that spending in 2001 was 18.5%. I am coming up with about 19.3% as of 1/1/2001. I use GDP = $10.025 trillion and expenditures = $2.001 trillion using data from the Federal Reserve. I have spending at 20.47% as of October 2005. Hmmm....