Monday, July 20, 2009

Stimulus, Bloat, Whatever

Check out this graphic. Even adjusted for inflation, we're spending more money than we did in World War II.

Of course, there are some things missing. We didn't have an interstate highway system in 1945. NASA, and weather satellites, didn't exist.

But the US government also didn't own car companies in 1945. Entitlement spending was a bit less than, and our military was several times larger than it is today.

And yet we're spending almost 4x as much today, in constant dollars, as in 1945. Wow.

11 comments:

Anonymous said...

Here's a couple more images that speak to this problem, too:

http://mwhodges.home.att.net/img00003.gif

http://mwhodges.home.att.net/fedcomp.gif

mazenko said...

It's not just about strict dollar for dollar comparisons.

Households spend many multiples of fifty years ago as well - even adjusted for inflation. We didn't have television, internet, cell phones, and all other sorts of automation that we do now. So, it clearly costs more.

There is no comparison between armies with and without aircraft carries, nuclear powered submarines, and stealth technology. Should we scale back spending simply because it costs ten to fifty times more the infantry of the 1900s or the cavalry of the 1800s?

That is why health care costs more as well. Adjusting for inflation doesn't address the development of technologies such as MRIs. However, I'm not in favor of limiting investment in new technologies.

Darren said...

Inflation should take care of some of that. Computers are certainly cheaper and more powerful than they were in 1945--they can't be the only items that way.

mazenko said...

What about aircraft carriers, space shuttles, nuclear-powered subs, satellites, MRIs, etc.?

Darren said...

Using that argument, eventually we won't be able to afford *anything*.

I thought technology was supposed to save us money....

mazenko said...

Since when is technology supposed to "save us money"? Is that the initial question inventors ask? I doubt it.

There are numerous reasons why innovation happens. Money is one, efficiency and effectiveness is another. The stethoscope costs more, but it's better than a head on the chest.

Darren said...

If it doesn't save us money, we're screwed--because eventually either we won't progress or we'll be taxed 100% to pay for our government, and at that point we won't progress.

mazenko said...

We'll never be taxed 100%. Even when the marginal rate in this country was officially 89%, no one in the country came anywhere near paying that.

The answer is the most basic economic formula - cost/benefit analysis.

And there are plenty of logical, rational people in government and the private sector - on both sides of the aisel - who can make these decisions.

Darren said...

If that were true, we wouldn't be in the mess we're in.

Brandon said...

"plenty of logical, rational people in government"???

What?!?

maxutils said...

How are efficiency and effectiveness NOT related to money?