Saturday, May 25, 2013

Update on Federal Spending

Back in December of 2012, I wrote this post on Federal outlays, expressing my fear that the stimulus spending of 2008-09 had become permanent.

Below is a chart with the data updated to 2013 (projected); data from the White House site (outlays are in nominal dollars). Without getting too fancy with statistics, I would propose that it is now looking as if a good part of the stimulus was temporary.  There have been two years when nominal spending has now declined -- in Dec. 2012, it was not yet clear that actual spending for fiscal 2012 would decline.  It did.  Particularly as a percent of GDP, outlays have declined and while they are not back to pre-2009 levels, it appears to me that they are not far off now from what they would be following a trend line beginning in 2000.

The CAGR for nominal outlays from 1996-2007 is 5.48% and from 2008-2013 is 4.32%.  So there too, there has been a slowing of the growth rate even including the stimulus spending (which really hit in 2009).

Not sure who can take credit (update:  or blame, if you believe more spending is good) for this.

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