I only wish we could have met under better circumstances...
I found that I was often getting the run-around from politicians...some claiming things are the best they've ever been and others saying that things are the worst they've ever been. Since I try to pay attention to the actual numbers for things, I could tell where we are now on issues like "did defense spending go up?" and "was there really a cut to social programs?". But how do today's numbers compare with numbers from 15 years ago? 25 years ago? 50 years ago?
So I did a little research...
This page presents my findings thus far. I plan to include more charts as I have time.
Since I have the numbers for inflation already in my spreadsheet, I'll be plotting things both in "budget dollars" and "constant dollars" for comparison.
I hope you enjoy my work!
Here's the basic problem:
By expressing items in constant dollars, I account for changes due to inflation. As you can see, there used to be balanced budgets.
Here is how much money the federal government took in. Most of it came from us, the American people.
Even when expressed in constant dollars, the government has tended to take more and more of our money. The decline in the early 21st century is due to a combination of tax cuts and recession (especially in California), but seems to have turned the corner in 2004.
This includes "on-budget" as well as the highly-weasely "off-budget" items. In other words, this is the total amount spent.
When I look at this next plot, I feel a bit humbled. Take a look at that spike corresponding to World War 2. If any of my grandparents were alive, I would ask them for stories about the rationing.
I was interested in seeing how much of the increase in recent years is due to the increasing population. Unfortunately, I have only found year-by-year population numbers for the past few decades. But this is enough to clearly see that we are spending more per person.
I wonder...has the quality of life in America increased accordingly?
Yes, it is true -- prior to the mid-1970's we only ran deficits in times of war or depression. Those spikes below zero correspond to years in which we ran a budget surplus.
For this next plot, I looked at what fraction of the spending is actually deficit spending. Are we going over by 5%, 10%? Well, now you can see...
Not meaning to insult anyone, but I remind you that the budget deficit is the amount overspent per year. The national debt is the sum of all the deficits since the founding of our country.
A plot of the national debt over time is:
When expressed in constant dollars, the national debt is:
Of course, there are a great many more people alive in the United States today than there were in 1800. Here is the debt per person (for those years for which I have population numbers):
Yes, you read that correctly. Every man, woman, and child in the United States would have to fork over approx $29,864 to pay off the national debt!!
As the next plot shows, this increase is not due solely to inflation...
Some economists think it is meaningful to look at the national debt in
terms of the gross domestic product. OK, here's that plot:
Most of the spending (more than 90% of the current expenditures) can be traced to one of three categories: defense spending, social programs, and interest on the national debt.
Notes:
When expressed in constant dollars we can see more detail as to how the make-up of the federal budget has changed in the post-WW2 era.
Defense spending is one of those political topics about which people seem highly polarized. It also seems to be one of those topics about which the truth is often an early casualty during debates.
I have no respect for people who lie simply to make a point.
Since the defense of our country is tightly linked to our prosperity (we won't do very well if we are conquered!), it makes sense to look at defense spending in terms of:
And so...
Well, with that much debt we end up paying a pretty penny or
two in interest each year.
The mandatory interest payments have been relatively low in the late 1990's
and early 2000's due to exceptionally low interest rates. That is changing
now that interest rates are returning to historical norms. That's a depressing
thought.
And it's an even more depressing plot...
OK, how bad is this? It is a non-negligible fraction of our GDP!!
I have plotted the numbers back to 1941, which is the first year for which I have
the necessary data:
and in constant dollars per person.
This last plot is particularly interesting, as it provides a real measure of the average productivity per American. That the plot is increasing with time reflects the increases due to technological advancement and is an excellent sign. This is the primary reason for the economic dominance the US has achieved over the past century -- we just plain outperform other countries.
What's missing:
I have not yet been able to find data for:
Budgetary values: White House Office of Management and Budget: http://www.whitehouse.gov/omb/budget/fy2008/pdf/hist.pdf Congressional Budget Office: http://www.cbo.gov/budget/historical.shtml Population Statistics: US Census Bureau: http://www.census.gov/popest/archives/pre-1980/ Inflation Data (CPI): US Department of Labor: Bureau of Labor Statistics http://www.bls.gov/cpi/