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Where your treasure is, there will your heart be also

By Michael J. Smith on Thursday June 18, 2009 12:37 PM

Wonderful chart below -- click on it to see full size:

Full context here. Comment seems superfluous.

Comments (8)


This is not the most useful way of thinking about gov't expenditure, it should be done in % of GDP. The chart's creator even acknowledges this method.

I re-gonkulated the graphic to show this proportion; I also removed the "over 206 years" and "over 12 months" 'cause that's even sillier - it's not total gov't expenditure over 206 years, just selected (ie in order to show rate of spending proportion you'd have to analyze the time over which each of those expenditures was made, and even that's a little arbitrary), and I added WWII to keep everything in proportion.

I also couldn't figure out how NASA expenditures were calculated, plus it seems like double-counting, what with the moon project being a separate expense (and btw, is that moon race BOTH Soviet and U.S. spending?)

Anyway, you can check it out at:


Cool. I see the point of comparing to GDP, but the absolute constant-dollar amounts are of some interest, too, aren't they? We look at a lot of things this way -- wages, house prices.... But ratios are always fun. Re-gonkulation per capita might be fun too.

Wages & house prices are important in relation to a constant - people. One person (or family), one wage, one dwelling.

But gov't expenditure is meaninful relevant to that which is governed, unless you're trying to make that contrast.

Eg expendiitures of the us gov in the last 12 months vs 12 months of crisis spending of the Iriquois nation circa 1800.

Get my drift? It depends what your comparing, and I don't think the author knows what the comparison is. I look at that chart and think "gee, the economy is much bigger than it used to be! Cool!" (As I'm sure the us/iriquois comparison would illustrate)

To finish the comparison, if we were to conduct an effort on the size of ww2 today (which I personally think would be justified), we would have to spend over 20 trillion dollars. Now that's what I call social spending!


i'll see your 20 trillion
and raise you by taxing

let's tax
the top twenty trillion
of personal wealth holdings
at a rate to service the entire federal debt

look up ricardian equivalence
here's the revenge on that brown nosing
trickster barro
by barro's own means no less


Wages & house prices are important in relation to a constant - people. One person (or family), one wage, one dwelling.
Absolutely. Which is why I thought some kind of per-capita comparison might be fun -- say, the constant-dollar costs of these various social undertakings represented as a multiple of the median constant-dollar hourly wage, divided by population.

(Population doesn't have to be adjusted for inflation, even though the individuals who comprise it seem to be steadily inflating.)

"The economy" doesn't consist of dollars interacting, it consists of people interacting, right? And each such person has, on average, a certain number of dollars to spend on lovely things like wars and bank bailouts.

No idea what the outcome would be, but I take calvo's point that ratios are more interesting comparanda than absolute numbers. Just suggesting a different denominator than GDP, which has always had a strangely abstract feel to me.

Good thing I never took an economics course. I would certainly have flunked it.

Per capita definately does show something more interesting - sorry not to acknowledge that point, I mis-read it the first time through.

But still, unless we view the advances of technology as wholly illusory, the key reference point for defecit spending is GPD.

Yes, people relate to people, but under prevailing conditions.

A per capita governmental debt calculation, without some index of productivity, suggests comparison to personal or family savings, leading working people to try to "fix" society's shortfalls with only their paltry earnings, leaving as invisible the great windfall of their productivity, which is siezed in the form of profit.

Much better to compare these expenditures to gross profits (but of course these statistics are not reliably available).


Hmmm. But if advancing technology is the basis for using GDP as the denominator, then... wouldn't you expect a constant-size war to be cheaper in absolute constant dollars rather than more expensive? I mean, a hundred bill in constant dollars oughta buy you a lot more war these days than it did in 1942, right?

Of course technology doesn't help you with bank bailouts and the like -- they never seem to get any cheaper. But presumably the scale of bailout needed (or thought to be needed) is commensurate with the scale of failure, and that in turn is related to the size of the economy. In that case the GDP denominator makes intuitive sense to me, though for reasons not related to technology.

And of course it makes sense to compare deficit spending to GDP. But the original item wasn't talking about deficit spending -- just about spending, period: how much we've historically spent on various things -- right?

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