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November 19, 2008 | 34 Comments

On the growth of government spending: who benefits, the rich or poor?

UPDATE: Reader Stephen Dawson has kindly shown where I made a very stupid error. This error caused me to label the y-axis incorrectly in the third picture below. It also causes the fifth picture to change dramatically. I will leave my original analysis untouched, except to indicate in bold where it is wrong. See the post from 23 November 2008 for an update on these two important figures, where I will give the proper interpretation. Thanks again to Dawson.

It’s obvious that, as time has gone on, the Federal Government has spent more and more and more money. Since a reasonable proxy of government control over the lives of its citizens is the outlay of funds from its treasury, a sane observer might wonder about this increasing trend.

A raw plot of the Federal outlay by year will not do as a measure, however. At least two adjustments have to be made.

A government ruling over 1000 people will obviously have to spend more than one ruling over 10 people, so we have to adjust by population size, which has also been increasing. We can be reasonably sure we are measuring population to, say, the nearest million, which is close enough. The budget is also reasonably well measured.

Then there is inflation, the phenomenon whereby a loaf of bread costs $1.00 ten years ago becomes $1.89 this year. But inflation is difficult to measure because of many reasons. For one, that loaf of bread probably isn’t the same as the loaf now: it has different ingredients, uses changed baking technology, improved packaging—who knows what has changed in that ten years. The population, too, which has increased over this period also tends to drive prices higher because it makes certain commodities scarcer. Plus, nobody knows which are the ideal items to track to measure cost increase: bread? cars? Eliot Spitzer’s hobbies? We’ll use inflation adjusted dollars in some of the plots, but we have to remember that these pictures are a lot more uncertain.

The first picture is the Outlay per Capita: that is, the dollars spent per citizen since 1901 (data from the US Budget Office and the US Census).
Outlay per capita
I have also colored the years red for Republican presidents, and blue for Democrat presidents. The years from 2009-2012 are obviously projections, so should not be taken too seriously. Not too much can be noticed, except for the obvious exponential increase in government control, plus the two blips for World Wars I and II.

Since the rate of increase is exponential, we can see things clearer by showing the picture on a logarithmic scale:
Outlay per capita
The two war-time era increases now pop out, with WW I showing the biggest increase. The after-war decreases are also more obvious. And we can see the small blip for the Korean war and a smaller build-up for Vietnam (all these increases are in the blue areas). The steady increase after Vietnam is also clear: where you can see a higher rate of increase in George W. Bush’s years because of the Iraq/Afghan wars, but certainly not a giant surge. Of course, I do not parse how much of any spending is due to military and civilian funding.

The big, but maybe not so obvious. point is that 2008 spending is about $10,000 per person. That means the government is spending $10-grand per head. That also means, in some loose sense, that if you pay more than this in taxes—if your personal bill is more than $10k—then you are paying more than your equal share. This implies, then, that if you are paying less than $10k you are not paying your equal share. You are requiring those that are better off to support the bulk of the government.

Now, if you are a Lefty, then you probably like this idea. “Let the rich pay their ‘fair’ share!” But to say this ignores Briggs’s Doctrine of Unintended Consequences. To see what I mean, let’s look at the same picture adjusted for inflation. The inflation adjustment index is from Oregon State University.
Inflation-adjusted Outlay per capita in 2008 $
This is adjusted to 2008 dollars. Suppose I were to declare that every citizen had to pay $10 to the treasury. If you, for example, were Dad and the only worker in a family of four, your bill would be $40. The last time this happened was in the 1940s (remember: this is 2008 dollars, not 1940 dollars, so $40 was affordable).

This analysis is broadly correct, but the y-axis was off. You can see that the cost in 1940 was about $700 per head, or $2800 per family of 4 (all in estimated 2008 dollars). Still affordable, but to as many families as $40.

Everybody can afford this (with the trivial exception of a handful of people). Everybody would contribute an identical amount and would, morally at least, be entitled to an equal say in government. “But, wait! The rich will still have more money, and with money comes influence!” Yes, true. It is a tautology to say the rich will have more money, and it is obvious that with more money comes more influence. But this is not a good argument, my Lefty friend. Because look at 2008, where the bill is $10k per head. Only a small percentage of the population (about 5%) can afford this. Those 5% of course have more money. They further are aware of where that money is going. They will therefore have plenty of motivation to control the outflow, which means controlling the laws, rules, and regulations—controlling the government—which say where the money is to go. This small minority will use their money to align the government to their views.

Now, the rich certainly would have done this to some extent had everybody had to pay the same share, but they will have orders of magnitude more motivation to do it when they are paying nearly all the bill. And—here’s the kicker, so pay attention—they will still have plenty of money left over to have the same influence over other non-governmental matters, influence they already had before this tax structure started asking more of them.

About the only thing this confiscatory tax policy will do is to take enough money from the just-rich, to make them no longer rich. Thus, more control will flow into the hands of fewer and fewer people. This is inevitable. And it’s happening at an exponential pace. The noble idea of having those with more pay for those with less guarantees that those with more will have even more, and those with less will have even less, plus they will suffer a corresponding loss of influence and control over government.

Disproportionately taxing the rich to grow government, and doing so at an increasing, exponential pace, thus guarantees the creation of a oligarchic ruling class. Supporting these tax laws, then, will have the exact opposite effect of your intent.

I use the term “Lefty” not to indicate “Democrat”, as will be clear in the next two pictures:
Change in Outlay per capita in 2008 $
These are the year-to-year change in outlay per captia. The first is unadjusted, the second is adjusted to inflation.

The unadjusted shows the blips due to the wars, plus the accompanying decreases in the budgets after the wars ended. Most of the wars, WW I, WW II, Korea, and Vietnam happened under Democrat administrations. But there was only moderate growth until Nixon was president in 1969, then the increases began with real vigor, and it has rarely abated since (only one year in Reagan’s presidency did the budget not increase significantly).

The scarier picture is this one, adjusted by inflation:
Inflation-adjusted change in Outlay per capita in 2008 $
This shows the contest between R and D more clearly. Nixon (R) had a modest rate of increase, but Carter (D) really showed how it was done with a stellar increase. Reagan (R) did his best, but could never match Carter. Clinton (D) was also just an average player. Bush (R) beat them all. No taxpayer left behind. Again, Obama’s (D) tenure is just a wild guess by the budget office; however he has often boasted of increasing taxes on “the rich”, so we can guess that his rate will be Carter-like.

My comment below about my not being an economist is right on: I am not and made a fundamental error here. The new figure shows the changes more clearly—they bounce around 0 a lot more than I originally thought. Be sure to see the 23 November 2008 post for more on this Figure.

I am not historian or economist enough to say why the rapid increase in government control really got going with Nixon, but we have some hints in his social spending policies. The funny thing is the opposite of common wisdom appears to be true. Most, but not all, of the increases in spending for the military have come from Democrats (the wars just mentioned); and most, but not all, of the increase in spending on social causes have come from Republicans. Each side, as we all know, is continuously accusing the other of the opposite! It might be a case of projected guilt all politicians feel (at some level; I cannot really guess why this is so).

Even if you don’t agree with me on anything, it must be clear that this rate of increase cannot continue indefinitely. It cannot even continue for very much longer. Roughly, every 20 years brings an order of magnitude increase in government control. So in 40 years, in the trend continues, the bill will be about $1 million per head, an impossibly high number. Power would be coalesced into the hands of a very, very few.

I don’t know about you, but I plan a two-pronged strategy: (1) to never vote for anybody, D or R, who I think will raise taxes, and (2) to be one of those who can afford the tax, because I’d rather have the control than not.

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Signed copies: update

Update: to get a signed copy you must email me at with SIGNED COPY in the subject line. I’ll then contact you for payment details. Cost is $32.00. You can order the book below, but it won’t be signed. If you did buy from below thinking it would be signed, send me an email and I’ll let you know where to mail the book to get it signed. Sorry for any confusion. Thanks.

Got another batch of books in last night and I’ll mail them out this morning.

This takes care of all the orders I have received so far.

Perhaps one of the wisest men to ever live has said this about the book:

[T]he book is very good. I am enjoying it thoroughly.

Buy one now. Perfect Christmas gift for that brainiac you know. You won’t be disappointed, and neither will they.

Small book cover
Click here to order.

November 17, 2008 | 15 Comments

Statistic of the day

In today’s New York Post comes a startling new research finding, bulleted in this graphic:
NY Post

In case you can not see the picture, it says that 29% of women “Care about partner’s appearance” and that 63% of men do.

Internationally renowned researcher Dr. H. Harrister was quoted as saying, “You know what that means, don’t you?”

“It means that 37% of men are lying.”

November 15, 2008 | 37 Comments

Classical music is dying

That’s the sort of headline you see from time to time in places like Arts & Letters Daily and the arts sections of major newspapers. Invariably, what follows a few weeks letter is the rebuttal which argues, “No, it isn’t.”

It’s obvious, the Dying side says, that appreciation for serious, adult music is at an all time low. Just turn on any radio, walk into almost any business, or attend nearly any function purportedly for adults and you will hear simple, pop music, or worse. Classical music has all but disappeared.

Not true, say the Optimists. Just look at our attendance figures for last season’s opera or for the yearly Jazz Festival. Sure, the numbers wax and they wane, but they have held steady since roughly 1950. Concert halls are just as filled as they ever were.

I’ll suppose that later claim is true, that attendance is holding roughly steady. I can’t find an exact figure, but let’s say that concert attendance is 100,000 seats per year in the United States. The precise number doesn’t really matter: pick any steady number you want and what I’m about to say is just as true.

Here’s the relevant picture:
Classical music attendance

The left-hand vertical axis depicts the U.S. population in millions since 1950; it shows a doubling over the past 50-60 years. The right-hand vertical axis depicts the percentage of residents who buy tickets to adult music concerts conditioned on the fact that each year about 100,000 tickets are sold. The numbers are in hundredths of a percent. If I’m wrong and the number of tickets sold is a million, then the figures are the same but are in tenths of a percent.

This figure, of course, doesn’t account for people who buy multiple tickets. If we assume that the percent of people who buy multiple tickets is roughly constant, then the shape of the red line is still the same, it’s just shifted up or down a slight bit. Even if this percent is not constant, there will only be a small correction.

So, while population has doubled, appreciation has fallen by roughly 50%. No trivial amount, that.

Of course, some people will not go to concerts and will buy music instead. But we already know that the sales of classical music have dropped off a cliff. The number of radio stations that host classical music has declined, too. Do you even have one where you live? (NYC is an oasis in this respect.)

How about listening online? For one example, it wasn’t until earlier this year that Pandora began carrying adult music. In fact, when I was listening the other day they had a tool pop up on the side of their player which would allow you to move three sliders and then click a button, after which a search engine would find music you like. The distressing first slider was BPM: Beats per Minute. The others were something inane like funkiness or quirkiness. I wish I had the opportunity for a screen capture to show you. Anyway, I am unable to discover statistics on on-line listenership beyond the anecdotal, but I don’t find anybody boasting. The opportunities are there, on line, they are just not being fully used.

I don’t think lack of education accounts for the demise of serious music. There’s more than enough of that panacea going around. I believe it has more to do with fears of being called an elitist or of being thought old, or at least no longer youthful. To say that what you are hearing when you go into a bar (restaurant, store, bookstore, etc., etc.) is juvenile, simplistic, or just plain awful makes you sound crusty and sour. If it wasn’t for the constant barrage of bad music everywhere you go, we elitists would keep quiet about all this. But silence in a public establishment is rarer than a sense of humor in an Upper-West-Side Obama supporter.

To some extent, it’s those who create music who are to blame. Some of the musicians who call themselves “serious” are anything but. I’m thinking of that fellow Glass (which rhymes with) and that guy who “wrote” the piece where those on stage sit still for 9 minutes so the audience can hear the sounds of people gasping for breath after discovering they paid good money for the privilege. That’s art. Jazz in the mainstream has mostly devolved into the pablum called “smooth”: all flutes, and what I suppose are synthesizers, all the time.

I’m with the crowd shouting “Dying!” Too bad the only response seems to be “Who cares!”

To get a head start on the criticisms: no, there is nothing wrong with listening to pop music, just as there isn’t anything wrong with drinking pop. An occasional glass can be just the thing. But if you drink nothing else, your teeth will rot out, your stomach will ulcer, and you’ll regress towards diabetes and imbecility. Listening to Andrea Bocelli is like switching to diet pop: you have the idea that you’re drinking real pop, you just can’t identify that strange aftertaste. You are what you listen to. The British Invasion was just that: we should have fought back. Imagine a world without the musics of John Lennon. It’s easy if you try. Heaven.