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I’m too lazy to extract the data, but roughly speaking, in the mid-1950s, the federal government spent between 17% and 20% of GDP.  Of that percentage, between 80% to 85% of that spending was discretionary. What this means in an 8th grade sort of way was that there was lots of money to quibble over and to be allocated to public goods.

Move forward to today, where for the last decade or so the federal government has spent between 20% and 25% of (a much larger) GDP. Of that percentage, about 33% of that is spent on discretionary funds, with the lions’ share of that being allocated to Defense.

The “lock-in” of entitlement spending is happening at the state and local level and in some sense was at one point “discretionary” too.

One Response to “Pondering Government Spending”

  1. blink says:

    Yes, that it once was discretionary is crucial. Suppose that each government prefers to tie the hands of future governments. Is there a good political economy/public choice argument that explains the greater discretion enjoyed by (at least some) governments in power since 1950 than those in earlier times?

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