From: MEDELMA@cms.cc.wayne.edu (Michael Edelman)
Subject: NIPA 40-year data
Organization: Wayne State University, C&IT
Date: Mon, 31 Aug 1992 18:59:49 GMT

Here's the summary data averaged over decades showing trends in tax and
spending- all spending figures expressed as %GNP:
 
Decade    Real     Average     Gov't     Defense     Non-Defense
          GNP      tax         spending  Spending    Spending
          Growth
 
1950s     3.3      18.4         18.5     10.5        8.0
 
1960s     3.8      18.9         19.4     8.3 (-2.2)  11.1 (+3.1)
 
1970s     2.8      19.4         21.1     5.5 (-2.8)  15.7 (+1.9)
 
1980s     2.7      19.9         23.7     6.1 (+0.6)  17.6 (+1.9)
 
1989-91            20.0         23.0     5.7 (-0.3)  18.8 (+1.2)
 
1991               19.4         24.2
 
This is all taken from the latest National Income & Product Account figures
of the commerce department, so all the numbers are similarly scaled, etc.
In other words it's legit to compare them.
 
First, taxes. What we see is a remarkably stable growth of 0.5% per decade,
across all administrations, throughout the post-war era. In other words,
there was no net Regan tax cut- the thing that was supposed to have
mortgaged our future. If you remember the debate over 5,5 & 10 and what
Congress did subsequent that's no surprise.
 
Second, while tax grew linearly, spending grew much faster. But where was
the increase? Common "wisdom" says it was the huge military buildup. But
we see a fairly steady decrease in the post war era. There's a tiny bump
of .6% in the Regan decade, corresponding to a brief peak in the early
80s, but remember also that Reagan's first year included Jimmy Carter's
military budget increases, and that Reagan's first military budget (1982)
was actually lower than the projected Carter military budget. There was
also a drop of .4% at the end of that decade. So if we're looking
for a net effect we've got a .2% increase. Did this kill growth? Hardly.
There's another aspect of this data- the "peace dividend" money that the
Democrats are dying to spend. We already spent it. We've been spending the
peace dividend since the end of WWII.
 
So where did it go? What made overall spending jump from 18.5% of GNP
to 24.2? Social spending. Even during the Reagan era, social spending
grew over three times as fast as military spending, and Reagan's social
spending was 1.9% higher than the averaged spending of Nixon, Ford and
Carter. While military spending has nearly halved since the 50s, social
spending has more than doubled.
 
Looking at the 89-91 average we see that Reagan's budgeted military spending
continued the earlier trend as he cut military expenditures further. But
when Bush took office and agreed to a "compromise", social spending went
up again.
 
It was not the policies of Reagan that killed the 90s; it was George Bush's
stupid policies. What Clinton has promised is increased social spening,
albeit at a much higher rate, and increased taxes. I leave it to you to
decide the effect of that.
-----------------------------------------------------------------
 Michael Joseph Edelman           Wayne State University
 medelma@cms.cc.wayne.edu         Computing & Information Technology
 mje@pookie.pass.wayne.edu        Detroit, Michigan
 medelma@waynest1.bitnet          (313) 577-0742
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