I think it’s fair to say that the fundamental animating belief of the modern conservative movement is that government in general, and the federal government in particular, has grown so large that it now dominates the private sector and threatens our liberties and our economic prosperity.
It has become Leviathan, hungrily gobbling up more and more of the hard-earned wealth of the citizenry that it was intended to protect. That’s the theory anyway. If I have it wrong, I’m sure I’ll be corrected.
So let me ask what may seem an impertinent question: Is that really true? We’ve all heard the rhetoric for decades now, repeated so often in so many forms by so many people that it is now accepted as unchallengeable truth in many quarters. But are there hard data to back it up? Is the government payroll soaring year after year, sucking the economic lifeblood from private enterprise? Is it taking more and more of what we earn as individuals? Is the federal government taking an ever bigger slice of the economic pie in general?
The data reflected in the following charts would seem to argue strongly that none of that is true, that the Leviathan that so terrifies many Americans is largely a fictional construct. Taking the questions posed in the above paragraph one by one, let’s address first the notion that government payrolls are soaring.
The above chart, found at the economics blog Calculated Risk, tells us that if you exclude teachers, total government payroll as a percentage of the workforce has actually declined since 1976. A second, similar chart at Calculated Risk that includes educators shows government payroll flat, rather than declining, over that same period. (The mini-peaks you see every 10 years represent temporary Census workers).
So the answer to the first question is no. Government payrolls are growing no faster than civilian payrolls, and if you exclude teachers have actually declined significantly as a percentage of the workforce.
The next chart attempts to address the second question: “Is the federal government taking more and more of what we earn as individuals?” Drawing upon data that we discussed earlier this week, compiled by the conservative Tax Foundation, it demonstrates that for every income group, the average effective income tax rates have fallen significantly since 1980. So again, the answer is no. In fact, as individuals, we are actually paying less and less of what we make to the federal government and keeping more and more.
Of course, the personal income tax is just one of several sources of revenue for the federal government. The most important question of all is the final question: “Is the federal government taking an ever bigger slice of the economic pie in general?” Is it feeding at the trough, becoming bigger and bigger, until it threatens to consume even our economic seed corn, as many argue?
Again, the answer is no. For 40 years now, federal revenue as a percentage of GDP has bounced around within a relatively narrow range. (In 2009, it fell to 14.8 percent, a level not seen since 1950. I didn’t include it in the chart above out of fear it would be misleading. That artificially low rate is a product of the deepest recession since the Great Depression.)
However you want to measure it — the ratio of government employees in the workforce, average income tax rates, total federal revenue — government is not increasing its death grip on the American economy and by many important measures is taking less of a bite than it ever has. In other words, the basic narrative driving today’s conservative anger has no real basis in fact.
You are now free to move about the cabin and argue with each other.