Tuesday, July 19, 2005

Is government too small, too large, or about the right size?

I have always been interested in both economics and politics. I would like to get everyone's opinions on the size of the government of The United States.

I am looking at government spending as a percentage of GDP. In simple terms, I am looking at what percent of all money spent in The United States is spent by the government (Federal, State, and Local governments all combined.)

According to my research:
In 1920 government spending was 12 percent of GDP
In 1947 (After WWII) government spending rose to 22 percent of GDP
Today government spending is about 40 percent of GDP (I found government
statistics range from 36 percent to 43 percent!)

As a note of comparison the German government, a socialist government, spends about 51% of its total GDP.

Do you think the government is too large, too small, or about the right size? Please post your comments. I think this could be an interesting discussion.

I graduated from Snider High School in 1985. If I would have been asked this question in 1985 I would have said that the government was about the right size. Today I feel much differently, I think the government is too large. I think the government should spend about 25% of GDP.

What do you think?

From a political standpoint both The Democratic and Republican parties are increasing government spending at every level each year. They are both passing legislation that favors larger government. Libertarians believe the government should be smaller.


Debbie said...

How did you arrive at the nice round figure of 25% of GDP as sufficient government spending?

What's wrong with 24% or even 26%?

If you actually reached 25%, would you then be satisfied and stop fighting for more limited government?

What do you think constitutes legitimate spending by our government that makes it necessary to spend 25% of GDP?


LP Mike Sylvester said...

I just made up the nice round number of 25%! I have read the works of several different economists who feel that the government should spend about 25% of GDP in a capitalist country.

I think the Federal government should spend money on those things specified in the Constitution. I think the state and local governments should spend money on those items that a majority of their citizens want them to spend money on.

tom said...

might want to ask which level of govt should be the largest. I vote for govt. from the bottom up not the top down. local govt should get the lions' share of our funds. local police,fire, schools, hospitals, water,sewer, streets come first. The federal govt should get whats left, not the other way around. tom

Anonymous said...

I don't think it is the size of the government that is important here - rather is the government doing it's job? And perhaps even what is the government's job?

Unfortunately, I think most of government spending is just getting flushed down the toilet to no avail!

I think if we could find a way to cut out government waste and have systems in place that really worked we wouldn't mind so much how big the government was.

Unfortunately, it seems the bigger - the more inefficient - the more waste we see. Therefore, I guess size does matter!

LP Mike Sylvester said...

I tend to think government should be largest at the lowest levels, and get smaller the further away from the tax payer it gets.

If you go with my 25% figure, I might say that 10% of all spending should be done by local government, 8% by the state, and 7% by the Federal government.

Ponch (Erik) said...

Hear here, Mike.

- Erik

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