Chart of the Day: Is it a Spending Problem?

In his budget address, Gov. Corbett talked a great deal about the overspending during the Rendell administration. Ben Waxman responds in the Daily News (I’m paraphrasing) “Nuh-uh, there’s no spending problem, we just aren’t collecting enough taxes due to the recession (and that’s the fault of greedy Wall Street).”

However, the chart below illustrates the growth in state government spending over the past 20 years—adjusting for inflation, a $2,080 increase per person. Sure, the recession reduced revenues…but every economist will tell you that recessions are part of the business cycle. When government spending grows faster than inflation, and faster than taxpayers’ income, it will result in major shortfalls.

In fact, if Pennsylvania had simply limited the growth of spending to inflation plus population growth over the last eight years, the state would have a surplus this year (without stimulus aid) rather than a deficit.

As a bonus, here is a chart of national data, showing total government spending from 2001-2011, during which time government spending ballooned to 43 percent of the U.S. economy (a post-WWII high). Yes, “everybody else is doing it”—but it is still a spending problem.

To reiterate: state government spending tripled in the last 20 years. Total U.S. government spending doubled in the last 10. That is a spending problem.