Cost of government - 58% of national income?

Is this economist pulling our legs,or what?

Government Growth
Big-picture Report

government spending plus regulation compliance costs mandated by federal, state and local government. You will note the latest year shows the government spending-regulation combination at about 58% of national income (43% spending plus 14.9% regulatory compliance costs).

The current ratio of 58% equates to 6.7 months per year of a worker's income needed to cover government (federal, state, local) spending & regulations - - (5.2 months to cover government spending and another 1.5 months to cover mandated regulatory compliance costs).
http://mwhodges.home.att.net/piechart.htm#chart1

How much does it cost to govern us?

Got contrasting esimates? Please post them here.

;)

Pardon me, got an error message indicating I should try again as the thing didn't post.

Welcome to DU, by the way!
:hi:

would be able to do better than a homepage on their ISP. :eyes:

though he does cite his own website as an authoritative source.

It's difficult to determine the basis for his statistics.

SPENDING mode.

His examples identify Clinton administration officials as the sources of the U.S. troubles. After 2000, the problems are caused simply by "your government".

On edit: He also seems rather dense on the question of where the dollars spent by the government actually wind up. He seems to have the notion that they vanish from the nation's economy.

He also seems rather dense on the question of where the dollars spent by the government actually wind up. He seems to have the notion that they vanish from the nation's economy.

This is a critical observation, often overlooked by the "hate government" crowd. The government is merely another economic player, albeit a large and powerful one. They spend all the money (and more) that they receive. They pay wages and benefits. They build infrastructure (public wealth creation) and provide services that could not/should not be provided by the private sector. They make bad economic decisions as well as good ones, like any economic player.

When viewed in this light, they are neither enemy nor savior. It is up to the citizens to demand that governments serve them rather than enslave them.

We have met "the enemy" and they is us.

The last time I checked Fed, State, and Local government spending represented about 50% of national GDP. This is much to large for my tastes. Government spending on the federal level also has the distinction of being able exceed tax revenues. In other words, our federal government is partly fueled by deficits, that become a future liability on us and our children. Now you know why almost everyone loves structural inflation and personal debt. Those future IOU's can be repaid with cheap "Fed funny money."

The regulation compliance costs are an estimate at best. If the compliance costs are equivalent across the board for all competitors in an industry, they are effectively useless as far as competitive position is concerned. After all, if both you and your competitors pay them, nobody has a competitive advantage.

That being said, useless regulation saps the economic enterprise for capital that could be used to improve product/competitive position through R&D. It is critical that new regulations must be viewed using a cost/benefit analysis that takes into account not only direct cost/benefits but also externalities that frequently fly under the radar. For example, the cost of pollution rarely gets quantified in direct health or environmental costs because those who frequently bear those costs do not have the financial or political muscle to insist that they be added to mix. Hence, a polluting industry is receiving an indirect subsidy if it doesn't have to price environmental compliance into its product/service.

The system is so skewed by the fundamental absurdity of Fed Central Bank interest rate targeting/economic engineering that most of these observations become minor in the larger scheme. The entire US economic system is based on the fallacy of "free markets" fueled by monetary "central planning." Until that is addressed, the rest becomes far less relevant.

I mean, if you consider that government actually doesn't produce anything, ie, they BUY things

For example: when Gov't pays Halliburton (private sector) where does that fit on his widdle chart?

He's conviently bundle social security in with "social spending". I suppose he also thinks that govenment funded education is a bad idea.

Just what does Mr. ATT/~Homepage think people do with their social security checks? Pay taxes? NO - they BUY things from the "private sector"....

Let's go back to the "good old days" of the 1930's!!!!!!!!!!!!!!

Jerkoff.

In fiscal 2004 total federal, state, and local government expenditures equaled 30.9% of GDP. Thus, he is a liar, a very poor liar. http://www.whitehouse.gov/omb/budget/fy2006/sheets/hist15z3.xls

On his website he asserts that $2.4 trillion is equal to 26% of the economy. Since GDP in 2004 exceeded $11.5 trillion he also is stupid. http://www.whitehouse.gov/omb/budget/fy2006/sheets/hist10z1.xls

Nice find!

buries it in Fort Knox? Typical ignorantly selfish Libertarian brat!

In fact, governments pay people to do necessary jobs (everything from soldiers to park rangers to firefighters to schoolteachers), and the money these people earn is recirculated in the private economy.

Governments buy things (everything from land to cars to paper clips), and those purchases mostly benefit private businesses.

Even the much-maligned welfare payments (less than 1% of GDP) circulate into the private economy almost immediately, since poor people spend most of their incomes on rent and food.

Federal regulatory agencies do periodic cost benefit estimates to justify their existence. The last summary report I saw, several years ago, all the agencies bottom lines showed net benefits.

Thus the regulatory compliance cost should be less than
zero.