No, federal spending and employment are not “out of control”

Among the leading fantasies of the moment are that federal employment and spending are “out of control,” so drastic action is needed to put things back in order. These are lies. Some people who utter these lies probably know better and some don’t, but they’re still lies.

First, let’s look at federal expenditures and revenues as a percent of GDP. (These come from table 3.2 in the national income accounts, by the way.) People who want to deceive will often cite raw dollar amounts to amplify the gee-whiz factor, but the only honest way to render these quantities over time is by comparing them to total economic output. You could, if you had deceptive intentions, say, “Federal spending is up by $2.3 trillion over the last five years.” Which is true, but GDP is up by $7.8 trillion.

 

 

Aside from surges around recessions (mid-1970s, early 1980s, 2008–2010) and the covid pandemic, the expenditures line has been essentially flat for the last 40 years. A serious problem, if you’re concerned about debt and deficits—I’ll address that some other time—is that, aside from the late 1990s, revenues haven’t kept up with spending since around 1970. They took hits from George W. Bush’s tax cuts after 2001 and from Trump’s after 2017, but the revenue line has also been essentially flat for decades, just at a level well below spending. Funnily, the people most concerned about debts and deficits—rich people and those who shill for them—are the ones most opposed to paying taxes.

And now federal employment, graphed below as a share of total employment and the population.

 

 

Both are in downtrends. In 1950, back when America was Great, federal employment was 4.4% of total employment and 1.3% of the population. In 2024, it was 1.9% of employment and 0.9% of the population. Both are exactly the same as when Trump took office—there was no surge under Biden. Both are well below where they were when Reagan took office.

Not that this will have any effect on the Discourse. But hope dies last.