Friday, September 2, 2011

Federal, State, and Local Government Spending Levels Now Reaches Highest Levels in History

According to this study by George Mason University, Federal, State and local government spending in the U.S. now approximates 35% of GDP. This is the same level as the peak of government spending in circa 1944 as the U.S. was in a World War leading the charge rolling back Nazism in Europe and North Africa and against Japanese Imperialism in the Pacific. We were also coming out of the throes of the Great Depression.

What is different today? Well, it is true we are still fighting at least two wars (Iraq and Afghanistan) and yes we are repeatedly hear how this post-2008 Financial meltdown economic environment is the "worst since the Great Depression". All correct, but still it seems a stretch to argue we are anywhere near the level of  crisis points (internationally or domestically) that would justify or explain the massive spikes in government spending. Stated another way, what are we, as American citizens and residents,  actually getting for all this government spending? In the 1940s, while it came at a great cost, we defeated two of the greatest insidious political movements of the modern era (Nazism and Imperial Japan). We also got institutions like Social Security and the SEC, though both as currently constructed today are flawed and in need of reform,  are as necessary and proper today as they were in the 1930s and 40's. What are we getting today for this spending? Dodd-Frank? The growth of government employees, protected by employee Unions, which FDR himself said (when talking about unionization of government employees) was wrong and set with pitfalls.


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