Question

Since about 1920, how has government spending compared with government revenues?

Answer 1

Government Income:

Government revenues in the United States have steadily increased from 7 percent of GDP in 1902 to more than 35 percent today.

Government revenues began at the beginning of the 20th century with 7 percent of the Gross Domestic Product (GDP).

For the rest of the 1920s, government revenues remained at around 11 to 12 percent of GDP, but tax increases at the "low point" of the Great Depression increased government by 18.9 percent in 1933 and 20 percent in 1938 just after the recession of 1937. The trend was clear; the tax power moved from the local level to the state and federal governments.

In World War II, the government's tax collection increased again, reaching a maximum of 30 percent of GDP in 1945.

After World War II, government revenues initially decreased, but then began a slow increase, peaking at 32 percent of GDP in the recession year of 1982 and 33.2 percent of GDP in the year of the recession of 2001.

Government Expenses:

Government spending in the United States has steadily increased from 7 percent of GDP in 1902 to almost 40 percent today.

Public spending began at the beginning of the 20th century at 6.9 percent of the Gross Domestic Product (GDP). Then it had a great momentum in World War I and ended at around 12 percent of GDP in the 1920s. Then came the Great Depression, and total government spending increased to 20 percent of GDP. Public spending peaked at just under 52 percent of GDP in 1945.

Although spending was again reduced to 21 percent of GDP immediately after World War II, it continued to rise steadily until it reached a peak of 35 percent of GDP in the lowest part of the 1980-82 recession.

Thereafter, government spending increased in the mid-30s until the collapse of the mortgage of 2008. After the bank and car rescues, government spending increased to levels of war with 41 percent of GDP. The emergence of the mortgage seems to have increased the expense of one year. Government spending in the short term in the future is linked to 36 percent of GDP.