Does government need to be even bigger?

Liberals strongly argue that government is not big enough to accomplish what it needs to do. There needs to be more civil servants helping disadvantaged folks. There need to be a lot more regulators keeping a lid on the excesses of corporations.

Intuitively this is not right to me and raises the question: In total, how much are we spending on federal, state, and local government today (and historically)? And if that’s not enough, what would be enough?

I can’t answer the second question, but here’s some data on the first one.

1. Total government spending per household is approximately equal to median income per household (Heritage Foundation). This can’t be good.

2. Total federal, state, and local government spending is currently about 43% of GDP. From 1996 – 2007, it ranged between 35.5% and 38.8% of GDP. One might explain the spike in recent years totally to the slowing economy – and that’s part of it, but if you look at Obama’s budgets, the trend continues regardless due to a permanent increase at the federal level. (

3. US is rapidly catching up to the OECD average spend as a percentage of GDP. Liberals will probably applaud this, but to me it is not a desirable direction to go. Not like it will rain misery down upon us, but it surely leads to slower growth and less prosperity for all. (Cato Institute)

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