Government per capita spending revisted

Reader Stephen Dawson, a writer from Australia, has twice tried to show me where I made a bone-headed error in two of the figures from the original government per capita spending article from a couple of days ago. This time I was smart enough to listen and so reproduce those corrected figures below. They are also now correct in the original article too, but I haven’t changed any of the analysis there.

The first picture is this one:

(If you’ve visited this page before, be sure to hit “Reload” to make sure you aren’t using an old image from cache.)

This is dollars spent per citizen adjusted to 2008 dollars. The caveats about our inability to precisely measure inflation, plus the partial confounding of inflation and population growth still hold. What changes from the original is the y-axis is now properly adjusted for inflation (in the original, I multiplied where I should have divided—one of my favorite idiotic errors).

The story for the correct figure isn’t too much different than for the incorrect one. Spending was relatively constant until the first World War hit, where it jumped dramatically. It came down a bit in the post-war years, but started rising again after the Great Depression and the installation of FDR. Then another big jump for the Second World War, this time shown in its proper scale. After the war, we have the same depressingly exponentially increasing trend. What might be surprising, however, is that trend briefly reversed itself during the Clinton years. Also remember that the dark blue section is for Obama, and that these numbers are wild guesses.

The second picture is this one:

This is the annual change in dollars spent per citizen adjusted to 2008 dollars. Numbers less than 0 mean that the budget decreased per person in that year, numbers greater than 0 mean that the budget increased per person. Note the logarithmic scale on the y-axis. This figure is useful to see what happened on a year-to-year basis, but the overall trend is still in the first picture.

Start with 2001, Bush II’s first year in power. He decreased the budget. Then came the wars in Afghanistan and Iraq, and spending increased. Then also came a host of social spending programs. As said above, the picture for Clinton is more flattering. Two years he increased per capita spending, but six years he decreased it. Bush I also increased spending. Working backwards, we see that the opposite pattern held for Reagan. Even Carter decreased per capita spending for one year. Nixon split, but ended with more spending than he started with: that is, his increases were larger than his decreases. The rest is easy to see.

Who tended to increase spending more, Democrats or Republicans? Not in dollars, but in trend: that is, who had more up than down years? Ignoring the upcoming Obama years, Republicans had 25 years with increased per capita spending, and 35 down years. Or, they increased spending about 42% of the time. Democrats had 20 years with increased spending, and 31 years with decreased years; or they increased per capita spending about 39% of the time. Thus, both parties have roughly the same proclivities towards increasing the per capita spending (especially if you consider Obama has promised to increased spending—who knows whether he will—but if he does, then Democrats will have increased spending about 44% of the years).

That crude analysis obviously ignores all subtleties, such as total cost increase or decrease. It turns out that, over this period, Democrats increased net per capita spending by about $5500, and Republicans increased the net by $4000.

If you are fan of one party over another, these figures are nothing to crow about.

Thanks again to Steve Dawson for keeping us straight!