"How do you rationalize that "government" cost 10 % of GDP in 1900 and now costs 38 % of GDP is not an increase? That does puzzle me to this day..." G2A
"I don't think most people compare govt today with govt 100 years ago. Thirty years seems like a more reasonable time frame. Some liberals (me) see charts that show spending is not increasing. MJ Federal spending as % of GDP" Laurie
Now to me it looked like the MJ graph was cherry picking. (ie time span, fed only, etc) However since I am willing to try Laurie's ideas I redrew my lines on the US Spending data to be ~1970 through today... And yes I understand that these are free handed in and could vary somewhat if I created them in excel. The reality though is that the slope will be very similar, and that is heading up... Especially the Total graph. (ie ~30% to 38+% in ~40 yrs)
For perspective, please review the G2A Continuum.
For argument let's say that Grp1 and Grp2 are happily negotiating a service fee. Both sides continue to be agreeable and willing to compromise within the range of say 25% to 30% for many years. Meaning that both sides can see value trade offs in this range. However Grp2 keeps pushing for a higher and higher percentage, and demanding that they provide services that Grp1 does not think add enough value, or services that may actually damage a good deal.
Who is really changing and who is staying the same?
When the Grp1 is finally pushed above 35%, 5% over where they are comfortable, and they start to balk and demand change. Who is at fault for the break down in negotiations?
Should Grp1 continue to "compromise" with Grp2, even though Grp2 never seems to be satisfied? I mean Grp1 agreed to go from 10% to 20%, and Grp 2 asked for more. Then Grp 1 "compromised" and costs went from 20% to 30%, and still Grp 2 said that it was not enough . Then Grp1 "compromised" and costs increased to ~35%, and still Grp2 villifies Grp1 as not negotiating and being unreasonable.
Finally Grp1 says enough is enough and refuses accept anymore cost increases. And Grp2 cries that Grp1 has changed terribly and is unwilling to compromise...
How does Grp2 and its supporters rationalize their cries? Thoughts?
53 comments:
We just weren't spending enough in 1960, obviously.
--Hiram
Or in 1900. And in general it was a much cheaper country to run back then.
--Hiram
It was cheaper to run a country back then. Individuals were responsible for their own lives and finances. And they had to live with the consequences of their decisions. Meaning that ours was a very Capitalistic and Individualistic country.
Then Grp1 and Grp2 agreed that sometimes this was not fair and put some saftey nets and forced contribution insurance programs in place. Thereby becoming less Capitalistic and Individualistic. (ie Capitalstic with Heart)
Now Grp2 continues to promote we become even less Capitalistic and Individualstic. They want society as a whole, and the wealthy specifically, to pay for the poor choices and efforts of individual citizens.
And this is fine, they like "fairness" and the idea of Social Democracy. This is America and they can lobby for it.
What annoys me is that the Liberals continue to rant that Conservatives are becoming extremist when the Liberals are the ones demanding these extreme changes in the American culture. Just look how far we have moved on the continuum in less than 100 years...
If you want to make a case that even a leftist can understand, graph the cost\benefit ratio of government schools from 1970 - 2010..
Oh, they'll make excuses alright, but I've found their excuses only serve to dig a bigger hole in which to bury socialism in as a whole.
In the end, since acknowledging the flaws in their conclusions is out of the question, discussions of government schools with leftists always end with the sort of vacuous responses Hiram begins his arguments with.
He's obviously a veteran of many rhetorical beatings.
Actually, Grp2 talks a lot about cutting government spending, but in reality doesn't really want to do it. For instance, Grp2ers in the U.S. House passed the Ryan budget with its general budget targets, but failed to pass a specific appropriation bill because they couldn't agree on what specifically should be cut.
This is born out by a poll of Grp1 and Grp2 which shows -- despite the rhetoric -- that most government programs are quite popular once you move down from talking about government in general to government in specific.
http://www.huffingtonpost.com/2013/02/28/budget-polls-spending-cuts_n_2776231.html
Unless you can explain how the basic, biological needs of human beings have changed in 100 years, it is perfectly reasonable to compare the price of government in that timeframe.
Leftists refuse to do so simply because it illustrates the corrosive consequences of their socialist agenda.
If you want to make a case that even a leftist can understand, graph the cost\benefit ratio of government schools from 1970 - 2010..
As a leftist, I have never been moved by cost benefits analyses because their outcomes are entirely determined by what you include as a cost and what you determine is a benefit.
--Hiram
Again, we see the truth of the old saw about "those willing to rob Peter to pay Paul can always count on the [political and poll] support of Paul."
The big problem is that nobody seems to worry about Peter and Paul's KIDS who will be footing the bill, to the tune of about $400,000 each over their lifetime! That's one heck of a mortgage to hand to a newborn.
Unless you can explain how the basic, biological needs of human beings have changed in 100 years, it is perfectly reasonable to compare the price of government in that timeframe
So things were really rotten in 1900. It's a point, I am willing to concede.
--Hiram
Point taken, Hiram.
If you want to make a case that even a leftist, with some brain function left intact, can understand, graph the cost\benefit ratio of government schools from 1970 - 2010..
f you want to make a case that even a leftist, with some brain function left intact, can understand, graph the cost\benefit ratio of government schools from 1970 - 2010..
I think it's the case schools are a lot better than they were in 1970. If you want to read contemporary horror stories from that period, I recommend Jonothon Kozol's "Death at an Early Age".
--Hiram
Sorry, got my Grp1 and Grp2 mixed up above.
I'm sure Kozol is fascinating masturbatory fodder for lefty defenders of the status quo, Hiram.
However I hope you wont be too put out if I stick to the facts rather than the work product of a leftist English Lit grad cum social psychologist from Berkely.
The fact is, the most widely accepted metric for graduation rates come from the National Center for Educational Statistics (NCES).
Unfortunately their numbers count proud holders of Graduation Equivalency Diplomas as high school "Graduates".
We can argue the efficacy of including those numbers, and we can argue the value of a GED, but we cannot argue with the fact that as of today, fully 20% of those counted as "graduates" are in fact GED holders.
Remove GED's from the equation and you lose 7-8% from the NCES totals. The fact is, we've been steadily losing high school age students since 1980...even before the inrush of Democrat voters, erm I mean, refugees from third world countries that are illiterate even in their own languages.
I direct your attention to the peer reviewed work of Heckman and LaFontaine (2007).
Sean's Link
HP Budgets Polls Spending
And I whole heartedly agree that the Republican politicians also have a very hard time not spending money to buy votes. This is one of my favorite accounts of the sins of both parties. Forbes It's a Spending Problem
TJ, Please provide some links to back your strong views. And please skip the sexual innuendos... We try to run a PG blog here... Thanks
TJ's Reference
Heckman and Fontaine
Urban Institute
John, be assured I don't toss in descriptive adverbs gratuitously.
Lefty twaddle like Hiram offered to back his inchoate argument serves no purpose other than to give the reader (and author for that matter) a sense of self gratification; there is no logical underpinning anywhere in such texts.
That being said, I'm a big believer in property rights; it's your blog and I'll abide by your rules.
Thanks for providing my missing link.
Right, John, which means your whole argument falls apart. The reality is that there are a lot of people who are opposed to government spending in the abstract, but when it gets down to brass tacks, there's little support to end anything of significance that the government is doing today.
People don't want change Medicare to premium support or replace Social Security with private accounts. So maybe your whole frame is wrong. If people don't in fact want to stop spending on these things, then the problem isn't a spending problem after all.
So there is no problem when a family loses their home because no one wanted to stop spending? Come now, you can do better than that...
TJ,
The challenge is that many folks see you as Righty Twaddle... Is there any point in that line of discussion or those labels... Just pretend you are talking in a business conference room to some professional peers...
G2A Relativity
John, I understand your point, and I respect what you're trying to do.
As I said earlier my thinking was once where yours is now, but after 15 years of dealing with them, I have concluded there is no point in trying to have a thoughtful discussion with lefties.
I don't want to disturb your website, and I do wish you well on your journey of discovery, so I'll bow out.
TJ,
We'll be here and you are always welcome if you change your mind.
My goal for G2A is a bit different from other sites. Though I am a fiscal conservative social liberal, I really don't want to convince people that they are wrong. I just want to challenge all readers to truly challenge what they believe and who they listen to. G2A Beliefs and Environment
My vision is simple.
"Raising social involvement, self awareness and self improvement topics, because our communities are the sum of our personal beliefs, behaviors, action or inaction. Only "we" can improve our family, work place, school, city, country, etc."
Have a great week !!! John
"People don't want change Medicare to premium support or replace Social Security with private accounts. So maybe your whole frame is wrong. If people don't in fact want to stop spending on these things, then the problem isn't a spending problem after all. "
Largely true, but if these people understood the alternatives-- like having only 75% of SS benefits at best, or having no benefits at all (since there is no obligation of government to pay them, they can be cancelled at any time), or having no one accept you as a Medicare patient because reimbursements are too low, or your kids and grandkids being unable to find a job or unable to live as well as you did because of crushing taxes (100% for 8 years, remember?), then maybe what people "want" would change to something they could actually HAVE.
I am still unconvinced that spending keeps going up and up. It look pretty flat to me for the last 30 years.
Misleading Mantra, Tax and Spend Version
Figure 3: Total State Spending (All Funds) as a Percent of
Private State Gross Domestic Product, Minnesota, 1963 - 2013
Nothing is going to happen anytime soon to rein in increasing costs in SS, medicare, and medicaid, as GOP cares the most about tax rates and is unwilling to make a grand bargain to address these issues.
I still think the "Misleading" graph is misleading and cherry picking.
Forbes Graph
Figure 3 in the MN Spending document shows an increase even while not showing the DFL 2014 spending increase. Imagine all those years the Liberals swore that the GOP was cutting, when in at actuality things were flat or slightly up since 1977. And nearly doubled since 1963.
The GOP was cutting during the Pawlenty years and the increase in state spending since the mid 70's is tiny.
So if you had Boehner's job would you make a grand Bargain with Obama? (just pretend that the caucus would follow your lead)
John Boehner Rejects Obama's Grand Bargain On Debt Ceiling
Is there any reason why it should be increasing faster than the MN GDP?
And it was staying pretty flat even through those terrible Pawlenty years. I am interested to see what that graph shows after the latest Daytom/Democrats spending increases.
From what this CBO graph showed, Fed tax receipts are already over the historical average, whereas spending is still above the historical average. Hopefully there are more cuts than tax increases in that grand bargain.
Especially since the lower incomes are still benefitting from the "Bush" tax cuts, where as the wealthier folks are getting whollupped and paying for those savings.
I think the Boehner link is pointing to the wrong place. (ie MN report)
John Boehner Rejects Obama's Grand Bargain On Debt Ceiling
Maybe cost of state govt has increased slightly due to healthcare costs, which increase above the rate of inflation. I think the state spends a good amount on healthcare.
Some liberals do random searches online rather than watch the Vikings and come across a report that says we recently experienced a decade-long decline in real state general fund spending.
Crumbling Fiscal Foundation: A Decade of Decline in State Investment
I am not a math major but it looks to me that the price of state govt is falling
The Sky Isn’t Falling, but the Price of Government Is
I especially like the closing line: "Right wing bellyaching aside, the accomplishments of progressive state policymakers during the 2013 session were a smashing success by any reasonable standard.:
Government employment certainly isn't keeping pace with the growth of population. And do we really want to equate size of government with spending? Does government get bigger when a child gets medicaid, or someone applies for Social Security?
--Hiram
Laurie,
Again with the short term, you are correct that things go up and down slightly. That is why it is important that DFL and GOP fight back and forth. I am concerned about the long term trend. (FYI Falling link is broke)
Hiram,
That is why I am using tax/GDP. A household can afford more if it makes more. If it adds people without increasing income, people had better tighten their belts or become more efficient/effective. Otherwise the household will start having financial problems.
And this case it is worse, family A has too many kids or applies for assistance. And Liberals believe that Family B should pay for Family A's choices. Very strange.
I mean for ~150 years our country was a strong Capitalistic society on the far right of the Continuum. People, for better or worse, were given opportunity and had to deal with the consequences of their choices, efforts, etc. And charities were there to help those who were unfortunate.
And in the next 88 years, we have shifted far to the left on the Continuum to the point where society is expected to bear the cost of the negative consequences for people's bad choices or lack of effort. And worse yet it is expected that the people who make good choices and work hard are taxed to pay for it.
On top of this the people who are trying to stop this slide are villified and accused of shifting to the Right. Which of course makes no sense as the shifting needle on the Continuum shows.
A perspective from the CATO folks regarding the Roman Empire's Downfall. It may be somewhat biased, however remember that those who do not learn from history are doomed to repeat it.
In our modern world we may not have armed forces chipping away at our wealth and power, however we sure do have global competitors.
OK, let's ignore the federal budget for a second, because I have the conclusive evidence on MN state spending. Using data from the State Dept. of Revenue, the US Census, and the Federal Reserve, I find that, since 1960, MN government spending has increased by a factor of TEN over that required to keep pace with inflation and population growth. Is government really doing ten times as much for the "quality of life" as they were 50 years ago?
I find that, since 1960, MN government spending has increased by a factor of TEN over that required to keep pace with inflation and population growth. Is government really doing ten times as much for the "quality of life" as they were 50 years ago?
Why wasn't government spending more in 1960?
--Hiram
Jerry,
The proof is in the data... Sources, sources, sources....
The Sky Isn’t Falling, but the Price of Government Is
MN Spending Decline Among Nation’s Biggest
Price of Government Declines Under the Dayton Budget
I didn'y find anthing that goes father bacl than 1991.
Maybe next I'll find something that shows property taxes are not going up either.
Maybe if you try squinting real hard and change to glasses with a different color of lenses.
Since the Liberals say the Locals were making up for the State budget constraint... What do your sources say regarding what local + state revenues have done over the past 20+ years in MN?
Sorry, but my one minute research turned up information about property tax changes only over the last 10 years, and they did go up, except for recently, when they went down again.
Let’s Say it Again, Property Taxes Going Down
Maybe you should update your post about trends in spending, looking at a shorter, 20-30 year time frame. It seems that spending does not always and only trend upward. I think I have provided many sources to contradict this claim for the last 20 years. We liberals are not so dumb or blind.
Not dumb or blind, just shortsighted apparently. (ie < 20 yrs) I don't think that I said anywhere that spending did not move around. My argument is that we are consistently moving from being a Capitalistic country towards being a Social Democracy. which I think has some big problems based on the history of other countries.
Now what you have presented is that the MN state tax has been flat to slightly down for ~20 years.
And you have presented that the property taxes have been significantly up for the past 10 years.
And you have presented that when the state jacked up spending/taxes this year, and property values are down, the property taxes will drop slightly.
My question is if you add the local and state taxes for the last 20+ years what has the cost of government been doing in MN?
Or do think it matters if you pay your local gov't or St Paul? To me both added together are what we are paying in MN.
MN Price of Govt Feb12
Apparently the MN POG takes the Local into account. However I am puzzled as to why it has not been updated since Feb12...
Oversight or fear of what the new numbers will show?
Here is a newer one - May2013. And it sure looks like Laurie is correct that MN seems to be controlling their costs.
Anyone know what the difference between "Total Personal Income" is vs the "MN GDP"?
Maybe I'll compare them later
Fed Reserve MN GDP
US Spending Local_State Cost vs MN GDP also shows that MN has been managing their finances well. Though it looks like they need to update their data.
"Jerry,
The proof is in the data... Sources, sources, sources.... " -- John
From the previous post:
"Using data from the State Dept. of Revenue, the US Census, and the Federal Reserve,..." All I added was the math, put it into Excel and generated the chart. It's astounding. If you want to duplicate the effort, feel free. Otherwise accept that the tenfold increase in spending is exactly that.
Would somebody please explain to me why government spending should keep pace with GDP or total income, rather than keeping pace with inflation and population?!? Private sector goods and services generally get cheaper as as competition. Compare the price (and quality) trend of an HDTV, for example, with the price (and quality) trend of a K-12 education.
Would somebody please explain to me why government spending should keep pace with GDP or total income, rather than keeping pace with inflation and population?!?
I don't know that it should. We compare government spending to those things as a way of giving it context and scale. How much government should spend is a separate policy judgment.
--Hiram
J,
If you find a way to automate learning and send the kids to a low cost country, then the CPI would be a good measure.
GDP Deflator vs CPI
MN Houses Indexes
"If you find a way to automate learning and send the kids to a low cost country, then the CPI would be a good measure."
That doesn't make sense. There are all sorts of schools educating better for less cost, even within the public school system. The question is why the best "value" school system, whatever it may be, doesn't predominate. Why should we spend twice as much to educate a kid from K thru 12 as we used to spend, with no obvious gain?
Sources?
Sources, again? Try the Minnesota Dept. of Education statistics. If you dig through them carefully enough and put the results through regression analysis, you will discover that, for all school Districts in Minnesota, the more money spent the WORSE the results on the basic skills test! For schools spending at roughly the average, results vary by nearly 2:1.
Oh, and the source for that "as we used to spend" is my own school district. We now spend about 150% more than we did just 15 years ago, when, with the same number of students, we had 15 National Merit scholars. Last year we had 15.
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