Federal spending perspective

Dean Kalahar:

The Democrats and President Obama have increased federal spending as a percentage of gross domestic product (GDP) to 25.3%. Liberals often speak in terms of "historical spending," in the 20 plus percent range. On the other side of the aisle, Rep. Paul Ryan's budget plan looks to cap government spending at 18% of GDP. The claim is that the 18 percent number mirrors historic average levels of government spending. The debate here is not whether the left or the right is correct, it's that they are both wrong and guilty of advancing a myth that has been spoken so often it is blindly accepted as fact.

The truth here is that the U.S. has thrived with far less government spending. Indeed, a look at times when we as a nation were imperiled offers a far different story than what you have been told.

Research shows that from the founding of our nation, 1787-1849 (63 years) federal spending averaged 1.7% of GDP. For the next 51 years, 1850-1900 (including fighting the Civil War) spending averaged only 3.1%. From 1901 till 1930 (including fighting WWI) it never reached 8%, and averaged approximately 3.2%.

At the height of the progressive movement (including FDR's New Deal) federal spending as a percentage of GDP never went above the 1934 level of 10.7%. Even after the historic 1944 (WWII) level of 43.6%, spending had fallen by 1948 to 11.6% of GDP.

In short, for the first 130 years of the U.S.'s 224 year existence, federal spending as a percentage of GDP averaged around 2.5%!

Remember, the first trillion dollar federal budget was not passed until FY 1987, while it took a mere 15 years to reach a two trillion budget and just 7 years to spend three trillion.  Spending is completely off the rails.