The Rise in Per Capita Federal Spending

The Rise in Per Capita Federal Spending

Veronique de Rugy | Nov 12, 2014

Government debt is projected to reach 77 percent of the US gross domestic product by 2024, if not sooner. Economists have identified that level of debt as counterproductive, yet this sad state of affairs is the result of a growing bipartisan propensity to spend, as a worrying trend has emerged: high levels of spending under Republican administrations have become institutionalized in Democratic ones.

This week’s chart shows the amount of real (2014) federal dollars spent per capita since the end of the Second World War. After adjusting for population and inflation, federal outlays have, with a few exceptions, grown at a staggering pace since 1945. The first Truman budget spent $5,039 per capita. Government spending per capita decreased for the next two years and in 1948 hit a historic low of $2,214—a low that has not been matched in six decades. Today’s spending per capita is more than five times this amount, at $10,970.

By the end of the Truman administration, per capita spending had risen back almost to the levels of Truman’s first budget, and it continued to increase under the next few presidents. Kennedy began his term by raising per capita spending to $4,304. Presidents Carter, Reagan, George H. W. Bush, and Clinton all began their terms with higher per capita spending than their predecessors ended with.

George H. W. Bush is the only president since Kennedy whose last budget spent less than his first, falling from $8,728 to $8,507 over four years. That trend was reversed under Clinton and George W. Bush, whose last budgets spent $8,665 and $12,422 per capita, respectively. However, as the chart shows, the increase in spending during Clinton’s two terms was very slight.

While some of the spending in fiscal year 2009 was a result of President Obama’s so-called stimulus bill, and the massive omnibus spending bill for that fiscal year was signed by Obama, President Bush bears responsibility for helping lay the foundation for the increase. This chart, however, does not illustrate that the current president is fiscally responsible, that he is not a big spender, or even that the government doesn’t have a spending problem. The chart shows that spending has not increased as quickly under Obama as it did under the previous administration. In fact, it has even fallen slightly, at least for the moment. But the federal government is still spending an enormous amount of money—more than in 2008 and in every single year before that. The fact that the government isn’t quite as expensive as it was at its peak—or not expanding as fast as it was before—doesn’t mean it is lean. Indeed, Obama’s fiscal year 2015 budget proposes to increase spending from an estimated $10,970 to $11,922 per capita.

This country needs to start making real and credible commitments to cutting government spending. With the president looking to put spending back on an upward trajectory, the new Republican-controlled Congress will need to champion the cause of controlling spending. 

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