[lbo-talk] what government spending?

[Wojtek S]

[WS:]  I do not think that I am missing anything here, because
transfers are reported as expenditures elsewhere (e.g. the household
sector that receives those transfers,)  for example,  social security,
medicare or unemployment.  The latter are included in current
expenditures (about $5 trillion in 2009 or 35.7% of GDP) but these are
not really "government spending" but rather insurance payments that
happened to be administered by government.  For these payments, the
government is really a pass through entity, not that much different
than a private insurance scheme.  If I am not mistaken, treating them
as a part of government budget (rather than a separate fund) was a
political decision made in the 1960s (Max?)

I understand that right wingers try to project an image of huge
government spending so they throw anything that can be associated with
government into it and then  call  it a waste - but that is a part of
their disinformation campaign. To counter that, it makes sense to
distinguish between what government actually consumes and what it
passes through - which directly benefits citizens.

Wojtek

On Tue, Oct 12, 2010 at 12:55 PM, Doug Henwood <dhenwood at panix.com> wrote:
>
> On Oct 12, 2010, at 11:28 AM, Wojtek S wrote:
>
>> According to BEA data
>> http://www.bea.gov/national/nipaweb/SelectTable.asp?Selected=Y
>> table 1.1.5
>> government (fed, state & local) consumption expenditures and
>> investment in 2009 were $2.9 trillion which is about 20% of GDP.
>>
>> What I find particularly annoying is that finding believable numbers
>> on the internet takes about 5 minutes (it actually took me 40 seconds,
>> but  I already know where to look for them) so numerically literate
>> people should have no problem verifying "facts" published that
>> obviously looks like a right wing tabloid.  Yet, the self-styled
>> state-hating lefties like James Heartfield have no qualms of
>> disseminating this right wing propaganda as long as it fits their
>> anti-state ideology.  Shame on you.
>
> Ok, some detail. You're missing transfers (and other little things like interest). Summary, with major subcategories, as percent of GDP, for 2010Q2. "Consumption" includes wages of gov employees, since it's a purchase of a current service. Investment isn't considered "current" spending, since it's long-lived. Transfers aren't consumption or investment since they're a payment for which nothing (except acquiescence in the system, man) is gotten in return.
>
> federal            27.0
>  consumption       7.1
>  transfers        15.9
>  investment        1.2
> state/local        15.4
>  consumption       9.9
>  transfers         3.7
>  investment        2.3
> total              42.4
>  consumption      17.0
>  transfers        19.6
>  investment        3.5
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