Tag Archives: The Heritage Foundation

What Heritage does not make clear about federal spending

A popular chart by the conservative think tank The Heritage Foundation is shared by thousands of people on Facebook every now and then. The chart is titled “Federal Spending Grew Nearly 12 Times Faster than Median Income.” The problem with this chart is that it does not paint a nuanced picture of how much the federal spending in the United States actually has grown. This is because one of the two plots is an aggregate number (total federal spending in dollars) and the other plot is a median value (median household income).

The fact that total federal spending has grown twelve times faster than median household income since 1970 is quite irrelevant if we do not take into account the growth in the number of households. If the number of households had grown faster than federal spending, the size of the federal government would actually have shrunk (Sweden has one of the largest public expenditures per capita in the world, but imagine how small the American federal government would be if its total federal spending equaled that of Sweden). So what did the household growth in America look like?

more people, more spending

As can be seen, federal spending grew faster than the number of households. But the number of households grew substantially, and this need to be deducted from the federal spending curve in the Heritage chart if a sensible comparison is to be made.

A caveat to be mentioned before showing the next graph is that it has not been possible to exactly replicate the numbers used by The Heritage Foundation. The calculations used here reaches the same number for federal spending of $3.6 trillion for 2010, but while Heritage estimates that the inflation-adjusted federal spending in 1970 was $926 billion, the number used here is $1.1 trillion. Similarly, both estimate median household income to be about $51,000 in 2010, but this blog (which copied numbers straight from the referred U.S Census Bureau report) uses a much greater number ($45,146 compared to $41,358) for 1970. So The Heritage Foundation finds that both federal spending and median income has grown at a faster rate than what this blog estimates. It is not clear from their chart which inflation-adjusted numbers they used or what price index they used to adjust for inflation, but overall this should not make too much of a difference. The general tendencies will still be the same. Especially since they find greater growth both in federal spending and in income.

When using federal spending per household instead of total federal spending, the graph looks very different. Here is a comparison to mean household income (which might better illustrates tax-paying abilities than median income). It turns out that federal spending still has grown considerably – but much less than what the Heritage chart shows.

growing government

So while The Heritage Foundation is correct that federal spending has grown quite rapidly – also in per-capita terms – the magnitude is much smaller than what their chart shows. And this would be the same case if one used their exact numbers as well, simply because the number of households has grown at a fast pace. Another measure of federal spending that might add some perspective to the debate on this issue is federal spending as a fraction of GDP.

big government

The chart made by The Heritage Foundation is often referred to as a long-term trend, and one of the main reasons why the United States has piled up so much debt. But this argument seems too simplified. In terms of share of GDP, there is no trend. Federal spending was actually lower in 2008 than in 1975, and lower in 2001 than in 1970.

Now, there are still good reasons to cut federal spending, but it is hard to make an argument that federal spending has grown at an explosive rate compared to income.

Simon Hedlin

Sveriges ekonomiska frihet

Bilden är grovt redigerad och kommer ursprungligen från ett nyhetsbrev från The Heritage Foundation (20/01-09). Samma ranking med detaljerad data återfinns dock här.

Simon Hedlin Larsson

Mindre roligt att vara flygresenär

Ni kanske minns skillnaden att resa till USA före respektive efter terrorattackerna den 11 september 2001. Efter förra veckans försök till attentat på en flight till USA har nu president Barack Obama uttalat sig och bland annat pekat på brister i säkerheten. Man kan ju bara föreställa sig hur svårt det kommer vara för icke-amerikaner att besöka och bosätta sig i USA framöver…

Till följd av juldagens misslyckade terrorattentat har nu Amsterdams flygplats Schiphol infört kroppsskanning av alla som passagerare som reser till USA. Att andra flygplatser vidtar samma åtgärd under det kommande året är att vänta. Dock finns det många anledningar till att vara skeptisk till stärkta säkerhetskontroller, och till att ifrågasätta vilken nytta detta verkligen gör. Som tidigare konstaterat finns det mycket som tyder på att verka för minskad fattigdom och ökad sekularisering är långt mer effektivt än att lägga mer resurser på passagerarkontroller.

Den konservativa tankesmedjan The Heritage Foundation drar också en liknande slutsats:

“Rather than spending billions of dollars more on airline security, the smarter answer would be to make sure suspicious persons are routed to secondary screening. These simple measures would still not be foolproof, though. Therefore, an even better strategy would be to break up the conspiracies that recruit, organize, train, and dispatch terrorists long before would-be bombers buy their plane tickets.”

Tyvärr leder starka känslor ofta till irrationella lösningar, och således får vi som tror på mer riktade åtgärder förmodligen vika oss för den djupt rotade rädslan och säkerhetshysterin. Ett hett tips för övrigt är att vid resor till USA hädanefter undvika New Yorks flygplats Newark så gott det går. Där kommer det nämligen bli fullständigt kaos.

Simon Hedlin Larsson