Federal Spending

A Closer Look
We've already looked at overall spending. Here we look at how much does the federal government spend per citizen. We do this for two reasons. First, the citizens must pay the taxes. Essentially, we are asking, "if it were split equally what would each person's share be?" Second, ideally spending is the cost of ensuring the common defense, and promoting the domestic welfare of the people. Thus we are asking "what is the average spent on each citizen?"
All graphs in Y2K dollars
Defense spending has traditionally been the largest portion of the budget. Although it no longer is we look at it first. The Viet Nam war and current wars are clearly visible. Quite surprising to many, the military cutbacks of the previous 25 years actually started before the Clinton administration, and slowed during this time. Numbers shown on the graph represent dollars per citizen per year. For example, since 2001 military spending has been increasing by $129/citizen each year.
When it comes to Social Security and Health & Human services spending, we see a few surprises. The only SSI spending decrease occurred during the Carter administration. The fastest SSI increase occurred under Nixon and Ford. In contrast the fastest increase in Health and Human Services occurred under both Bushes, while under Clinton, before the Republican Contract with America, Health and Human Services spending actually stopped increasing. Since then under Republican control it's been increasing at its fastest rate.
 
Most social and regulatory spending tended downward or level during the Reagan era and Clinton's first term. However, by the 2000's, with the Republicans in control of both Houses and the Whitehouse most types of social and regulatory spending have been drifting upward.
Justice spending shows three unusual trends. Under Nixon Justice spending increased at about $4.23 per citizen per year. Under Carter it decreased by about $2.00 per citizen per year. Since then Justice spending has been increasing exponentially, doubling about every 12 years.
Legislative spending tended downward under Carter, and Clinton's first term (both Democrats) The largest jumps in legislative spending occurred in 1977 and 2004.

Discretionary Spending
Some would say a true account of the actions of congress require us to look at discretionary spending only. This is the spending that congress and the whitehouse truly have control over. Again the trends we see are not what we expect.
Under Bush SR, and Clinton, before the Contract with America, total discretionary spending was decreasing. This resulted primarily from decreasing military spending. The Contract with America starts with an initial drop in both defense and non-defense spending. However, after the Contract non-defense spending increases slightly. In 2001, with Bush in the Whitehouse and Republicans controlling congress spending accelerated. Non-defense spending is now increasing roughly four times faster than it was before the election of George W. Bush.
A closer look shows most parts of non-defense discretionary spending were stable or decreasing from the election of Bill Clinton through 1997. After that most types of spending increase. After Bush took office in 2001 most types of spending accelerated again. Reflect on the myths that Democrats promote big government and Republicans are fiscally conservative. These trends show the opposites.
Observations

Between 2000 and 2005 federal discretionary spending increased by $232 billion. If you figure the typical job costs about $100,000 to sustain then the discretionary increase should have created about 2.3 million jobs. However, during this time only 2.2 million jobs were created, or 100,000 less jobs than we paid for. (Remember the tax cut was supposed to create jobs also.)

In contrast, between 1992 and 1997 discretionary spending dropped by about $60 billion. This drop in spending might have accounted for a loss of 600,000 jobs. However, during this time employment increased by 14 million jobs. (Odd that during this time many said that a tax increase stifled the economy.)

Both the myth that spending creates jobs, and the myth that tax cuts create jobs, appear to be erroneous.

Last Modified March 2006

 

 

 

 

 

 

 

 

 

Data Sources

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