Lessons From the Decades Long Upward March of Government Spending

Josh Barro

Below is a chart of total government spending (federal, state and local) as a share of GDP, going all the way back to 1929, the first year for which Bureau of Economic Analysis Data are available. This chart shows that government spending in 2010 was as high as it’s ever been as a share of the economy, 36.2 percent, slightly outstripping the previous high water mark of 35.3 percent reached in 1945, during World War II.

This chart has a lot to teach us about what we can expect from the coming fiscal adjustment.

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