Economic Snapshot | Wages, Incomes, and Wealth

Tracking growth in government

A weekly presentation of downloadable charts and short analyses designed to graphically illustrate important economic issues. Updated every Wednesday.

Snapshot for March 24, 1999

Tracking growth in government

One way to gauge the size of government is to look at the ratio of government spending to the size of the economy as a whole (which is measured as gross domestic product, or GDP). Such a ratio allows this year’s government to be compared to its size in the past.

The first graph shows local, state, and federal government expenditures combined as a share of GDP. The overriding trend is one of stability more than growth. Since the late 1970s, total outlays for all three levels of government have usually fluctuated between 30% and 33% of GDP.

The same holds true even when only the federal government is considered. The second graph shows that expenditures as a share of GDP have fluctuated around 23% since about 1976. This graph actually reveals an interesting trend. Outlays during the Reagan and Bush Administrations exceed those of both the earlier Carter and subsequent Clinton Administrations. In fact, when Clinton took office, the level of federal government spending was at its height at 24%. It has since fallen to its lowest point in nearly 20 years.

Source: Congressional Budget Office and EPI.

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