Saturday, July 30, 2011

Has Government Grown?

So, I had a little fuss with my good friend, the ever reasonable and painfully earnest Dr. Brendan Nyhan, @brendannyhan

Brendan tweeted: Big government! "the number of govt. jobs has fallen 2.2 percent" since 6/09. never happened in postwar recovery before (LINK)
I responded: Um...right. The number of gov't jobs NEVER falls, always grows. Why is that inconsistent with "big gov"?

Brendan responded: People think Obama had presided over massive government expansion and it's just not true.
I responded: Check gov as % of GDP! Massive spending increase equals bigger gov, no matter how much u love it

Brendan responded: most of that is denominator shrinking due to recession plus automatic spending in recession
I responded: most but not all. Gov has grown; there may be good reasons...

So, here's the question: NOT is bigger government better, that is a matter of ideological taste. The question is: Has government grown? What measure of "government" should we pick?

Here is total government employment, from 1960 to the most recent available, June 2011, by five year increments until recently (in millions of workers):

1960 8.7 1965 10.2
1970 12.7 1975 14.8
1980 16.4 1985 16.5
1990 18.4 1995 19.4
2000 20.8 2005 21.8
2008 22.509 2009 22.505
2010 22.730 2011 22.064 (June)

(From Census and BLS data)
I should note that the apparent Obama increase 2009-2010 was at least in part due to 225,000 or more temporary census workers. But then the decline in 2010-2011 has the same cause. Thus, the number of government employees, total is basically flat since 2008. Still these are totals; what about federal government employees?

2009: Total gov workers--22.505 Fed gov workers--2.820 State gov workers--5.330
2011: Total gov workers--22.064 Fed gov workers--2.830 State gov workers--5.091

In other words, federal employees have stayed level, and the states have gotten rid of 250,000 workers. The residual, local governments, must have gotten rid of about 200,000 workers.

Growth of Government? Not really. Government employment has been essentially flat since 2005. In spite of the rhetoric about "an army of new IRS agents," and other fears, government employment grew faster under GW Bush than under Obama, at least so far.

Has government spending increased? I computed the numbers and summarized them in this table.

Wow. If there was a spending increase, it was the last year of Bush, 2008-9. On the other hand, that was supposed to be one time emergency stuff, TARP and Porkulus.

The table shows that the size of federal spending has increased, controlling for inflation, by fully 25% since 2008. And it is not going back down. The "emergency" is permanent, I guess.

Government Growth? Yes, but less than I expected, and much of it in the 2008-2009 budget year, for which only Bush can be blamed. I guess it depends what your baseline is. If spending should have gone back down, and it hasn't, we can blame Pres. Obama. But the war and the recession... Obama didn't start the fire. Not sure why he would claim credit for throwing gas on it, though.

Scope and Intrusiveness of Regulation: This is mostly perception, I suppose. Not sure that the ranting about big business and the health care rules are really worse than the Patriot Act, Gitmo, and National Security Letters.

Deficit: Fuggettaboutit. Huge increase, much of it under Obama.

So, okay Brendan. Pres. Obama is no worse than GW Bush on making government grow. But Bush was the WORST PRESIDENT in 100 years or more. Is that all you've got for a slogan?

BH Obama: He is STILL not GW Bush.


doclawson said...

At least as measured by the Economic Freedom of the World index, the U.S. government has grown a lot since 2000. Spending is up. Property Rights worse. Regulation is up. Trade is more taxed/regulated.

The most recent data are only 2008. You can only guess what the new numbers will say!

Mark said...

How about real per capita spending. It takes off under Bush and then skyrockets under Obama.

LoneSnark said...

The government stopped hiring new workers and instead gave the workers it has significant raises plus solid gold retirements and benefits.

I suspect the democrats which came to power in 2008 owed a debt to the federal employee unions and made good on it.

Anonymous said...

Let me ask what happens when the porkalus train comes to town? Can any business of any political stripe resist the allure of fed contracts? The agents of the hiring process do not want to hear about the wastefulness of the program.

Just as when Alfred Marshall was asked whether supply or demand was more important, he said "Which blade cuts the cloth, the upper or the lower?" I propose that the same is true for whether the campaign contributions or the government largesse is most important. Whether the largesse is in the form of direct employment of contracts with private firms.

Anonymous said...

Do you have itemized numbers for Federal spending between 2005 and 2011? It would be interesting to see where government expansion has occurred during that time period.

Dave Hansen said...

Don't forget the growth of government contractors. There was a recent paper on it, but I can't find it at the moment. I recall that they argued that the growth of gov't employees was flat under Bush but the growth of contractors exploded. I'm not sure how that works out in the current administration. And what about all of the "non-profits" who only exist because of gov't grants?

Anonymous said...

Check out for all the spending since 1962. You'll want to aggregate the data by a combination of the categories.

Anonymous said...

If porkulus was temporary, why didn't government spending fall after it was all spent?

Tom said...

Hi to Dave Hansen; I came here to say that. It's much more than just the Black Water types; I'm preparing to count health insurance employees as the individual mandate comes into force. Also count rent seekers of every type, who work to protect their government guaranteed domains. That, of course, includes copyright whores and patent leeches. How would we figure the "size" of his government?

It's tough to give any credence to GDP figures, since GDP counts harmful spending (ie $40B DEA budget) equally with wasteful and beneficial spending. I would love to see the numbers for the Genghis Khan administration. He managed to kill 40 million people, while spending a pittance by U.S. Gov standards. How would we figure the "size" of his government?

Anonymous said...

Yeah, % of GDP is an interesting statistic, but it only confuses the question of whether government grew. If my credit card debt increases over time, I don't say I'm in less debt because GDP grew faster than my credit card debt.

Mike said...

Porkulus? You mean the stimulus package that was c.50% tax cuts (you on the right love tax cuts). Scientific research, repaving of roads (Durham has benefited from that) etc. Hardly a massive negative to our economy.

So Federal employment has not increased, regulation is no worse (nobody provided any stats to prove that). What ruins peoples credibility is when they say "America will end within four years of x or y". Crap. America is strong and will continue. As a % of GDp we are talking about 22% rather than the average of 18-19% and that is inflated by the recession. So 2-3% - wow the world will end! (not)