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The "Ever-Expanding" Government Sector, Illustrated

Discussion in 'Politics' started by hanimmal, Sep 13, 2010.


    hanimmal Well-Known Member

    Just found this post this morning on www.econbrowser.com thought it would add to some of the talk.

    September 08, 2010

    The "Ever-Expanding" Government Sector, Illustrated

    Just some numbers to bring reality into the general discussion:

    Figure 1: Employment in government, in thousands, seasonally adjusted (blue), and excluding temporary Census workers (red). Total series is "USGOVT" from FREDII. NBER defined recession shsaded gray, assumes last recession ended 2009M06. Source: BLS, August employment situation release. Update 8:50am Pacific, Thu 9/9:
    Reader John Eckstein was kind enough to send me disaggregated government employment data, so that I wouldn't have to do it myself. Here are some graphs thus generated. Note, these figures do not include uniformed military; they are based the establishment survey.
    Figure 2: Federal (red), state (green), local ex.-educ. (orange) and local-education (purple), as a share of total nonfarm payroll employment (FRED II series PAYEMS). Source: BLS CES data via John Eckstein, and FRED II, and author's calculations.

    Figure 3: Federal (blue), state (red), local ex.-educ. (green) and local-education (purple) employment, seasonally adjusted, in thousands (FRED II series PAYEMS), all series seasonally adjusted. Source: BLS CES data via John Eckstein, and FRED II, and author's calculations.
    Update: 12:50pm Pacific, Thu 9/9:
    For those afeared of the Federal government Leviathan, and unwilling to go the BEA website themselves, here is Federal nondefense consumption and gross investment as a share of GDP (see Table 3.9.5 for nominal series, then divide by nominal GDP, from 1.1.5).
    Figure 4: Federal government nondefense consumption (blue), and nondefense gross investment (red), as a share of nominal GDP. Source: BEA, 2010Q2 2nd release, Table 3.9.5, and author's calculations.
    jeff f

    jeff f New Member

    your graphs contradict each other. (1 and 3) plus the numbers arent the same.

    secondly, they are very misleading because education is financed by fed and state. education employemnt has soared, largely paid for by fed. not to mention our schools suck compared to the rest of the world.

    employment figures dont tell the whole picture because the fed buys workers for things like highways or buildings.

    last time i checked the fed is in the hole to the tune of 15 trillion +/-. thats the real story.

    edit; i misread 1 and 3. to get graph 1 you add all employement in 3. the numbers are very close. debt and deficits are still the major problem. can you get a graph of salaries and what they have done comparing private sector to public?
    jeff f

    jeff f New Member


    ginjawarrior Well-Known Member

    what you talking about? 1+3 match very well what parts are you saying arent right?

    hanimmal Well-Known Member

    Pretty sure what you are looking for is the second chart. It is taking the total wages of the private and public sectors (split them up from schools because what you said is true about education) and showing them as a total amount in each time frame (1955-now).

    15 trillion divided by 330million people = $45,454 Take that number and divide by 30 year treasury bills = $1515 per person for 30 years.

    I know it seems like a hell of a lot, and even $1515 is a lot per year, but it is a drop in the bucket of most of our taxes. If we can get through this and back to a surplus like we were under clinton, that gets wiped out to essentially no change to what we pay tax wise. The interest is basically killed with inflation, so that ends up being a wash too.

    And even though many of us may not like it, most of the things that our money goes to really does increase our potential to earn more money not only individually but as a country, making that pretty easy too.

    The problem is that they could have been doing things much better over the years, and they have not. From dumbing down schools with crap like intelligent design and little real emphasis on math and sciences for years to (as someone that once wanted to be a art major (aka I would have had no job) this hurts to say) too much money going to programs that are inneffective like art and the traditional way of teaching english (has anyone busted out a language tree thing, ever?).

    Better transportation, new technologies (how much has computers and the internet added to our economy over the last couple decades), sciences, and efficiencies that we just do not have at this point, all add to setting our selves up for success for years into the future.

    Hell as much as my liberal ass likes to admit it, the wars we are fighting in the end could really end up making us more money in the future as those countries we are spending a ton of money in start to develop into better economies, that opens up a huge opportunity to trade our goods with them, and that increases how much we make. And with what ever adminantium skeleton material for wolverine they just found out that the russians were trying to control opens up a whole new trade with the afgans.
    jeff f

    jeff f New Member

    after thinking about this a little further, i dont think govt employment is the problem. govt spending is, and almost all of it is welfare/social security for bullshit like social anxiety disorder.

    thats where the money is going. not talking about gramma. talking bout leeches.

    redivider Well-Known Member

    that's a load of crap.

    the US government spends about 1/2 as much in welfare programs for its citizens here at home, than it does on the military.

    you seem to love to assume people just suck off the government tit..... most people on welfare programs are very poor. you don't seem to understand that there are people in the US who are poor. poor as in "I didn't have anything to eat tonight because I don't have money" poor.

    poverty isn't just a 3rd world reality the US is exempted from.

    BudMcLovin Active Member

    Wrong, Wrong, Wrong.
    The largest percent of government spending is now entitlement programs. Defense spending benefits everyone in this country while entitlement spending only benefits those who suck the government tit.
    “Today, the core defense program has fallen to 3.9 percent of GDP, while entitlement spending has more than doubled to 9.6 per­cent of GDP”. LINK


    redivider Well-Known Member

    entitlement spending (medicare and social security) funds are not treated the same way as welfare programs (WIC), neither in legal terms, nor by public accounting standards.

    Social Security and Medicare are paid into for years and years when you work. the way the money is generated, the way the money is appropriated, and the way the money is ultimately spent is different in welfare programs and entitlement programs.

    if you bunch welfare with entitlement programs together then you are right.

    but it's just technicalities..... it's all a bunch of money none of us will ever get to touch when you think about it...
    BudMcLovin likes this.

    BudMcLovin Active Member

    Plus rep for that, I’m 33 and never expect to see a dime of the money I’ve paid into social security. It’s just another ponzi scheme. They sent old Bernie Madoff to jail for doing the same thing.

    hanimmal Well-Known Member


    Really if you are going to read something, check out this link I found while trying to find a chart. The video is something that you will really enjoy, but read the rest of the post reflecting on what it said. Pretty good.

    What I was going to say is a little more to your statement that social spending is only good for the people on it.

    So lets do the math. I am not sure where this goes, but it is fun to do these things right:

    Person A:

    Avg High school drop out earns $23k a year, and lets say that since they are not paying taxes and may have kids they are costing us an extra $5k a year. If anyone has any numbers on this I can redo the numbers.

    So since we are going to give them welfare almost all their lives lets say 55 years on welfare at 5k a year that we spend on them: $275,000 during their lives. And adding very little to our economy.

    Net benefit to the economy: $275,000 (on welfare from age 25 to 80)

    Person B:
    Decides that they want to get out of their situation and goes to college taking out a loan (which we pay for the interest $10,000k loan with 5% interest rate would end up costing us around: $3k over 5 years (way high number)) and about $5,000 for pell grants and what not per year, so lets say $15k altogether. But with some college we see they make about $33,000 a year, that would mean they pay about $198,000 in taxes.

    Net benefit to the economy: $180,000 (working from age 25 to 65)

    Person C:
    Decided to take out more loans and get a 4 year degree. They receive the same $5k pell grant for lets say 5 years and at the same time end up with the average of $30,000 in college loans which would be like $9k to us tax payers. So in total would be about $40k. They end up making about $55k a year and paying around $550,000 in taxes over their lifetime.

    Net benefit to the economy: $510,000 over 40 years (working from age 25 to 65)

    Person D:
    Decided to get Masters degree, doing same thing as above with their income level at $65,000 a year, taxes paid over lifetime: $650,000
    Loans and pell grants we pay as tax payers upfront while they work to get their education: $53,000

    Net benefit to the economy: $597,000 over 40 years (working from age 25 to 65)

    Person E:
    Got PHD while we footed their bill.
    $952,000 paid in taxes over their lifetime (making on avg 85k a year for phd earners).
    Costs about $73,000 (about $10k for each of the 2 years over a masters).

    Net benefit to the economy: $879,000 over 40 years (working from age 25 to 65)

    All of that entitlement spending more than makes up for itself the better people are able to take advantage of it. Sure those people that are not able to see how much better their lives would be if they simply used the system the way it was intended cost us a good amount, about a tenth of a penny over our entire working lives to each of us tax payers ($275,000 divided by 330 million people, over 55 years = .00015 cents.). Or for each person on welfare it would cost ten of us to come up with a penny.

    So another way to look at it. As an investment. We stand to lose out on that $0.00015 of a penny in our lives for each person that we have on welfare. But if it pays off we stand to make $879,000 divided by 40 years and 330 million people = .00067) for PHD, .00045 for a masters, .00039 for a bachelors, and .00014 for some college.

    So if we were investing $1 in this, we would get 6667 shares. We can lose that one dollar, or stand to gain: $0.93 (Some college), $2.60 (Bachelors), $3.00 (Masters), and $4.47 (PHD). That is a damn good investment. And one I am very happy we are paying for.

    The only number that I have not gotten a good number for is the welfare. I figured it at $5k a person, but again very easy to change it and it would not affect the numbers of the workers, only the amount that people on welfare receive. But even still, that would just mean that there would be that more of a pay off when people took advantage of the educational system, which is a huge government spending program, and still the largest payoff for the countries investments.

    NoDrama Well-Known Member

    so if everyone is a doctor, who will dig the ditches or clean the shitters? Just giving everyone a great education isn't going to solve all the problems. How many people do you think can't make it past a high school level simply due to ability?

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