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Actual government spending has gone down

A recent PolitiFact article reminded me of an old saying attributed to Mark Twain: “Figures never lie, but liars figure”. The article rates the truthfulness of a statement by Mitt Romney during the Republican presidential debate last week, where he said that under president JFK “government took up” 27% of the economy, while today it “consumes 37%”. Technically, Romney is correct.

Well, close actually. The first year JFK was president, 1961, government spending as a percent of GDP was 27.4%, but the next year it was 27.8%, so closer to 28% than 27%. And Romney’s definition of “today” seems to be 2009, when government spending was 36.5% of GDP. In 2010 it was 35.0%. So it is equally true that spending went from 28% under JFK to 35% today, but a rise of 7% doesn’t sound quite as dire as a double digit 10% rise. Also note that by saying “today”, he is implying “under Obama”, but the 2009 fiscal year budget was approved under Bush, not Obama.

But to me the real lie is Romney’s fear-mongering conclusion: “We’re inches away from no longer having a free economy.” Oh no! Government spending is running wild and is threatening your freedom!


The rise in government spending is almost entirely due to what are called “transfer payments” — programs like Social Security and Medicare. Indeed, Medicare didn’t even exist until 1965, so it accounts for a big share of the increase. And while Social Security is technically government spending, it is like an insurance program. You pay into Social Security all your life, and in return when you retire Social Security pays you something to live on. Note that your retirement payment is your money, and you can spend it on whatever you want. How is that not free?

If you leave out transfer payments, government spending actually decreased as a percentage of GDP, from 22.5% to 19.3%. Defense and international spending went down, from 9.8% in 1963 to 5.1% in 2010. Even interest payments, the scary boogeyman of the national debt, went down, from 1.5% in 1963 to 1.4% in 2010.

So what is Romney’s point? If the rise in Federal spending is threatening our freedom, then he should be proposing that we cut those programs that contributed directly to that rise, namely Medicare and Social Security. In order to reduce those programs to 1963 levels, he needs to eliminate 69% of their funding, and abolish Medicare completely. I wonder how popular that would be.

I think PolitiFact needs a new category — things that are technically true but are used to make conclusions that are completely misleading. They can call it “Liars Figure”.



  1. starluna wrote:

    I appreciate that Politifact does fact checking. But I do wonder how they decide when something is “mostly true” or “true” or “mostly false.” It seems like sometimes the determination is made based on the intention of the speaker and sometimes the intention of the speaker doesn’t matter. I can’t really tell how they use their discretion, which makes me less certain about the credibility of their rankings. The information is usually good, but the majority of people will just look at the rankings.

    Tuesday, August 16, 2011 at 7:37 am | Permalink
  2. Michael wrote:

    You forgot the other bogeyman of the Right: the poor. Prior to the Great Society (i.e., Johnson), only the elderly and disabled were eligible for Welfare. Cue Ronnie and his [racist/sexist] rants against the inner city “Welfare queens” living well on *your* dollar.

    Tuesday, August 16, 2011 at 8:20 am | Permalink
  3. Sammy wrote:

    “Bullshit” indeed.

    Tuesday, August 16, 2011 at 3:50 pm | Permalink
  4. Tom Bell wrote:

    Really???? You are quoting some douchebag’s assumption that there is less spending by pulling “Transfer Payments” out of the equation! Transfer Payment is Progressives speak for taxes wasted on social programs the vast majority of those paying said taxes will never use. Unless SS and Medicare survives; and if it does, they will see pennies on the dollar.

    Wednesday, August 17, 2011 at 1:40 pm | Permalink
  5. Michael wrote:

    Tom, the purpose of pulling transfer payments out isn’t to play some sleight of hand. It is to make the very legitimate point that the growth in actual dollars spent comes from programs put into place 80 years ago. It counters the implications of the GOP narrative that Obama’s “out-of-control spending spree” is responsible for the growth.

    Wednesday, August 17, 2011 at 2:21 pm | Permalink
  6. starluna wrote:

    Tom – your logic does not make as much sense as you think. You argue that money spent on SS and Medicare (and I assume you also lump Medicaid into that as well) is something that taxpayers never will never benefit from, therefore it is a waste.

    Apparently you are someone who does not have elderly parents or grandparents. And you do not have elderly or disabled family members who need nursing home care. Because if you did, you would be greatly relieved that your financial burden for caring for those family members was lessened because of those programs. Maybe you wouldn’t care if your in-laws, your parents, or your elderly aunts and uncles became homeless or have to keep their heat turned way too low in the winter. But in my culture, you are responsible for ensuring the well-being of your elders. And, as a moderate income household, our ability to contribute to the economy (i.e. spend money on consumer goods) would be seriously diminished if we were also responsible for paying for the housing, medical care, food, clothing, etc of our parents and elders.

    So, even though I currently do not receive SS or Medicare insurance, I definitely benefit from the existence of these programs. And our contributions to it far outweigh the actual cost of the burdens they relieve.

    Thursday, August 18, 2011 at 8:17 am | Permalink
  7. Arthanyel wrote:

    Tom’s conservative propaganda is not only missing logic, it’s missing mathematics. The statement that programs like Social Security and Medicare will only deliver in the future “pennies on the dollar” is mistaken. While these programs will have to be restructured to continue functioning in the long term future (primarily Medicare because medical costs are rising at three times the rate of inflation) they won’t return “pennies on the dollar” because:

    1) They are transfer payments. The total amount of benefits paid to a single person may fall in the future, but for every dollar going in about the same dollar (minus overhead” goes back out.

    2) medicare doesn’t have a trust fund and doesn’t assume dollars contributed by workers today will be paid to the same workers in the future. Social Security does, but that program is solvent far into the future already and with some means testing, lifting maximum contributions and rebuilding of the trust fund it should exist far into the future.

    Thursday, August 18, 2011 at 9:32 am | Permalink