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View Diary: 17 Year Old Girl's Response to the Republican Response (Updated) (199 comments)

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  •  Oh dear oh dear oh dear (0+ / 0-)

    Well, let's go through it.  

    You are distressed that he says that government spending is 1/4 of the entire economy, but complain that it is 24% of GDP not the entire economy.  The GND consists of:

    the personal consumption expenditures,
    the gross private investment,
    the government consumption expenditures,
    the net income from assets abroad (net income receipts),
    the gross exports of goods and services, after deducting the gross imports of goods and services

    Uh... what's left?  GDP = Gross national income except that GNI deducts indirect business taxes.  It's pretty much the definition of the entire economy.  

    Never the less, you then challenge his assertion that this is an "explosion of spending."

    Ignoring, for a moment the 1940's when federal spending as a % of GDP was very high due to the direct costs of WWII federal spending has hovered between 15 and 20% of GDP, with a consistent declining trend since the mid 1980s (see http://bit.ly/... ) The near-vertical jump in the graph in 2008 with a 20% increase from the year before is not "near explosive" when compared to 1942, but certainly echos the 5% jump in 1952. The difference is, the other two vertical excursions were directly war related.  The 2008 excursion is not.  

    This real - change can be better seen if you look at the data only from 1960 on so that WWII doesn't cloud the trends.  http://bit.ly/...

    Here you can clearly see that federal spending was trending up as a % of gdp from 1960 until the first round of Regan tax cuts in 1983, and that the downward trend then persisted through Bush 1, Clinton and Bush2 until the 2008 jump.  The term "explosive" might be a little extreme, but there was, in fact, a dramatic reversal of a 30 year trend.  We'll discuss why in the next segment.

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