US Government Spending 1902 – 2010; Depressions & Government Spending Go Hand in Hand

I found a neat site for data about US Government spending. I have posted spending charts before, but never really found data that goes this far back.

This is a chart I generated from data that I pulled from that site:


In particular I found it quite amusing the other day when someone told me that Hoover’s policies of cutting government spending from 1929 through 1933 have obviously shown how reducing government spending can result in a depression.

Well, of course this is just completely uninformed nonsense since government spending under Hoover rose from $3.81 billion to $5.1 billion on the federal level, from $11.7 billion to $12.6 billion in total, and from 12% to 22% (!!) of GDP in only 4 years.

Please, people! Check your facts before you go on the record with such foolish nonsense!

I understand that facts can be annoying when they contradict the tripe you’ve been indoctrinated with from childhood on. But I would strongly and passionately urge you to get off this delusion, to sincerely pursue the facts out there. The stakes are way too high to take this stuff lightly …

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3 thoughts on “US Government Spending 1902 – 2010; Depressions & Government Spending Go Hand in Hand”

  1. What about that huge spike in 1942, that didn’t result in a depression? And isn’t that a very long delay (10 years) for the 1918 spike to cause the depression? And the current depression does not follow a spike at all…

    Help me understand how the chart supports the conclusion.

  2. That huge spike in fact accompanied the worst period of the Depression, a brutal world war in which Americans had to suffer from massive cutbacks and in which millions died. The current depression does follow an increase in government spending as you can see with the second arrow.

  3. I would also like to add that what I meant was that increased government involvement is a NECESSARY ingredient in a Depression, not a SUFFICIENT one.

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