Since unemployment is the big problem (here I am following Keynes) it makes more sense to look at how many people the government employs as a measure of size, as well as spending programs with substantial positive or negative effects on employment.
I'm not sure how you are following Keynes exactly, but his analysis and prescriptions were premised on boosting aggregate demand via public spending in a case where monetary tools will not work rather than on government employment per se
. (Perhaps you can refer me to the appropriate chapter in The General Theory
that supports your assertion.) Your assertion that it somehow makes more sense to look at how many people are employed by government is false. The bulk of US federal spending is related to transfer payments, and that will continue to grow in importance over time. Trying to shift focus to government employment misses both Keynesian theory and the reality of government spending today, and for the last several decades.
As to job losses, what evidence do you have that the public sector was hit hardest, and thus decreased as a percent of total employment? The numbers Iíve all point to the opposite. Public sector losses, if there were in fact any losses, were less significant than private sector losses.
Hereís one chart.
Now this says that there public sector job gains. That cannot be right. Letís say itís not.
Letís say that the highest number of public sector job losses was about 750,000. (Thatís the highest number Iíve seen, perhaps you can offer something else.) Out of about 19.8 million total civilian government employees (per the US Census Bureau), thatís around 4% gone. Thatís bad. So if we assume the labor force started at around 155 million (roughly what it was when the recession hit) and full employment, and back out the public workforce, we end up with about 135 million private sector workers. Letís say 8.7 million jobs were lost (or bump it to 9 million, if you want), that means that roughly 8 million private sector jobs were lost. That would be about 6% of the total workforce. 6% is more than 4%. That would mean that government employment as a percentage of total employment increased. That is, not only is total government spending a higher percentage of the total, but government employment is a higher percentage of the total. The economy is more reliant on the government now than before the recession.
Again, if you have any actual figures, they would be helpful. As it is, you appear to be making counterfactual assertions.
Now, overlay the GDP on it so you can understand it better.
I understand it perfectly well. Your prior assertion was that the government had shrunk as a percentage of the ďtotal economy.Ē Everywhere else, that means GDP. You have established your own definition. Be that as it may, as a percent of GDP, government has grown since the recession began. I made it clear that was the result of federal spending and GDP reduction. Looking to the 90s, yes there was more rapid economic growth which resulted in a decrease in government spending as a percent of total GDP. However, you obviously missed the larger point. If you overlay the spending trend line the direction is quite clear. Government spending is rising and will continue to rise.
People really need to get over the 90s, because back then, Boomers were not retiring. Now they are. That changes the entire outlook for spending going forward. Social Security and especially Medicare expenditures are going to rise more quickly than in the past. These programs will need to be cut to be made sustainable. Repealing the Bush tax cuts wonít solve the problem. Thatís well known even among Democratic policy makers.
There is no evidence the federal government has shrunk.
Nope, and I ain't the one saying it has.
I wonder how much of the govt expenditure increase is simply due to the collapse of the dollar.
Increases tied to the CPI would mean relatively little is attributed to inflation. Increases tied to other indices may result in slightly higher numbers.