GDP growth cannot keep up with federal spending. The latter amounted to 18.2% of GDP in 1962, and is expected to grow to 21.3% of GDP in 2019 (0.28% average annual growth, or a 0.043 slope). This trend results from the combined downward slide of discretionary spending (-1.50% average annual rate, and -0.105 slope), and the strong upward thrust of mandatory spending (1.62% average annual growth rate, and 0.132 slope). Net interest is also growing, although at a slower pace. The chart illustrates the trends by means of the regression (dashed) lines.
This rundown of the federal finances exposes the impotence of the US economy to offset the spending obligations undertaken by the government. The current fiscal paradigm is bound to run into the wall, whatever the economic growth scenario may be. The decades-long policy of low corporate tax cum high individual income and payroll taxes, on the receipts side, combined with extravagant defense and security spending, against a background of social crisis, aging population and rising costs of health does not meet requirements, remains far behind the promises of the advocates, and fails to satisfy the needs of the constituencies. A true realistic economics approach is overdue.
Outlays by Budget Enforcement Act Category as Percentages of GDP | ||||||||||
Fiscal Year | Total Outlays ¹ | Discretionary | Mandatory and Net Interest | |||||||
Total | National Defense ² | Non-defense ² | Mandatory | Net Interest | ||||||
Total | Programmatic | |||||||||
Total | Social Security | Means Tested Entitlements | ||||||||
| 1962 | 18.2 | 12.3 | 9.0 | 3.3 | 4.7 | 5.6 | 2.4 | 0.7 | 1.2 | |
| 1963 | 18.0 | 12.2 | 8.7 | 3.5 | 4.6 | 5.5 | 2.5 | 0.8 | 1.2 | |
| 1964 | 17.9 | 11.9 | 8.3 | 3.6 | 4.7 | 5.6 | 2.5 | 0.8 | 1.2 | |
| 1965 | 16.6 | 10.9 | 7.2 | 3.8 | 4.5 | 5.3 | 2.4 | 0.7 | 1.2 | |
| 1966 | 17.2 | 11.5 | 7.5 | 4.0 | 4.5 | 5.3 | 2.6 | 0.7 | 1.2 | |
| 1967 | 18.8 | 12.7 | 8.6 | 4.1 | 4.9 | 5.7 | 2.5 | 0.7 | 1.2 | |
| 1968 | 19.8 | 13.1 | 9.1 | 4.0 | 5.5 | 6.4 | 2.6 | 0.8 | 1.2 | |
| 1969 | 18.7 | 11.9 | 8.4 | 3.5 | 5.5 | 6.3 | 2.7 | 0.9 | 1.3 | |
| 1970 | 18.6 | 11.5 | 7.8 | 3.7 | 5.8 | 6.6 | 2.8 | 1.0 | 1.4 | |
| 1971 | 18.8 | 10.9 | 7.1 | 3.9 | 6.5 | 7.4 | 3.1 | 1.2 | 1.3 | |
| 1972 | 18.9 | 10.5 | 6.5 | 4.0 | 7.1 | 7.9 | 3.2 | 1.4 | 1.3 | |
| 1973 | 18.1 | 9.6 | 5.7 | 3.9 | 7.2 | 8.2 | 3.6 | 1.2 | 1.3 | |
| 1974 | 18.1 | 9.3 | 5.4 | 3.9 | 7.4 | 8.5 | 3.7 | 1.4 | 1.4 | |
| 1975 | 20.6 | 9.8 | 5.4 | 4.4 | 9.4 | 10.2 | 3.9 | 1.6 | 1.4 | |
| 1976 | 20.8 | 9.8 | 5.0 | 4.8 | 9.5 | 10.3 | 4.1 | 1.7 | 1.5 | |
| 1977 | 20.2 | 9.7 | 4.8 | 4.9 | 9.0 | 9.7 | 4.1 | 1.6 | 1.5 | |
| 1978 | 20.1 | 9.6 | 4.6 | 5.0 | 9.0 | 9.7 | 4.1 | 1.5 | 1.6 | |
| 1979 | 19.6 | 9.3 | 4.5 | 4.8 | 8.6 | 9.3 | 4.0 | 1.5 | 1.7 | |
| 1980 | 21.1 | 9.9 | 4.8 | 5.1 | 9.4 | 10.1 | 4.2 | 1.6 | 1.9 | |
| 1981 | 21.6 | 9.8 | 5.0 | 4.8 | 9.6 | 10.5 | 4.4 | 1.7 | 2.2 | |
| 1982 | 22.5 | 9.8 | 5.6 | 4.2 | 10.1 | 10.9 | 4.6 | 1.6 | 2.6 | |
| 1983 | 22.8 | 10.0 | 5.9 | 4.1 | 10.3 | 11.3 | 4.8 | 1.6 | 2.5 | |
| 1984 | 21.5 | 9.6 | 5.8 | 3.8 | 9.1 | 9.9 | 4.5 | 1.5 | 2.8 | |
| 1985 | 22.2 | 9.7 | 5.9 | 3.8 | 9.4 | 10.2 | 4.4 | 1.5 | 3.0 | |
| 1986 | 21.8 | 9.7 | 6.0 | 3.6 | 9.2 | 9.9 | 4.3 | 1.5 | 3.0 | |
| 1987 | 21.0 | 9.3 | 5.9 | 3.4 | 8.8 | 9.7 | 4.3 | 1.5 | 2.9 | |
| 1988 | 20.6 | 9.0 | 5.6 | 3.4 | 8.7 | 9.6 | 4.2 | 1.5 | 2.9 | |
| 1989 | 20.5 | 8.8 | 5.5 | 3.3 | 8.7 | 9.5 | 4.1 | 1.5 | 3.0 | |
| 1990 | 21.2 | 8.5 | 5.1 | 3.4 | 9.6 | 10.2 | 4.2 | 1.6 | 3.1 | |
| 1991 | 21.7 | 8.7 | 5.2 | 3.5 | 9.8 | 10.4 | 4.4 | 1.9 | 3.2 | |
| 1992 | 21.5 | 8.3 | 4.7 | 3.6 | 10.1 | 10.7 | 4.4 | 2.2 | 3.1 | |
| 1993 | 20.7 | 7.9 | 4.3 | 3.6 | 9.9 | 10.4 | 4.4 | 2.3 | 2.9 | |
| 1994 | 20.3 | 7.5 | 3.9 | 3.6 | 10.0 | 10.5 | 4.4 | 2.4 | 2.8 | |
| 1995 | 20.0 | 7.2 | 3.6 | 3.6 | 9.7 | 10.3 | 4.4 | 2.4 | 3.1 | |
| 1996 | 19.6 | 6.7 | 3.3 | 3.3 | 9.9 | 10.3 | 4.3 | 2.4 | 3.0 | |
| 1997 | 18.9 | 6.4 | 3.2 | 3.2 | 9.5 | 10.1 | 4.3 | 2.3 | 2.9 | |
| 1998 | 18.5 | 6.2 | 3.0 | 3.1 | 9.6 | 10.1 | 4.2 | 2.3 | 2.7 | |
| 1999 | 17.9 | 6.0 | 2.9 | 3.1 | 9.5 | 9.9 | 4.1 | 2.3 | 2.4 | |
| 2000 | 17.6 | 6.1 | 2.9 | 3.1 | 9.4 | 9.8 | 4.0 | 2.3 | 2.2 | |
| 2001 | 17.6 | 6.1 | 2.9 | 3.2 | 9.5 | 10.0 | 4.1 | 2.3 | 2.0 | |
| 2002 | 18.5 | 6.7 | 3.2 | 3.5 | 10.2 | 10.6 | 4.2 | 2.6 | 1.6 | |
| 2003 | 19.1 | 7.3 | 3.6 | 3.7 | 10.4 | 10.9 | 4.2 | 2.7 | 1.4 | |
| 2004 | 19.0 | 7.4 | 3.8 | 3.6 | 10.2 | 10.7 | 4.1 | 2.7 | 1.3 | |
| 2005 | 19.2 | 7.5 | 3.8 | 3.7 | 10.2 | 10.7 | 4.0 | 2.7 | 1.4 | |
| 2006 | 19.4 | 7.4 | 3.8 | 3.6 | 10.3 | 10.8 | 4.0 | 2.6 | 1.7 | |
| 2007 | 19.0 | 7.3 | 3.8 | 3.4 | 10.1 | 10.7 | 4.1 | 2.6 | 1.7 | |
| 2008 | 20.2 | 7.7 | 4.2 | 3.5 | 10.8 | 11.4 | 4.1 | 2.9 | 1.7 | |
| 2009 | 24.4 | 8.6 | 4.6 | 4.0 | 14.5 | 15.2 | 4.7 | 3.4 | 1.3 | |
| 2010 | 23.4 | 9.1 | 4.7 | 4.5 | 12.9 | 13.5 | 4.7 | 3.8 | 1.3 | |
| 2011 | 23.4 | 8.8 | 4.5 | 4.2 | 13.2 | 13.7 | 4.7 | 3.8 | 1.5 | |
| 2012 | 22.0 | 8.0 | 4.2 | 3.8 | 12.6 | 13.3 | 4.8 | 3.3 | 1.4 | |
| 2013 | 20.8 | 7.2 | 3.8 | 3.5 | 12.2 | 12.8 | 4.9 | 3.4 | 1.3 | |
| 2014 | 21.1 | 6.8 | 3.5 | 3.2 | 13.0 | 13.5 | 4.9 | 3.7 | 1.3 | |
| 2015 | 21.4 | 6.5 | 3.4 | 3.1 | 13.5 | 14.0 | 4.9 | 3.8 | 1.4 | |
| 2016 | 21.4 | 6.0 | 3.0 | 3.0 | 13.7 | 14.2 | 4.9 | 3.9 | 1.7 | |
| 2017 | 21.1 | 5.7 | 2.8 | 2.9 | 13.5 | 14.0 | 5.0 | 3.8 | 1.9 | |
| 2018 | 20.9 | 5.4 | 2.7 | 2.7 | 13.3 | 13.7 | 5.0 | 3.7 | 2.2 | |
| 2019 | 21.3 | 5.2 | 2.6 | 2.6 | 13.5 | 14.0 | 5.1 | 3.7 | 2.5 | |
| Average annual change rate | 0.28% | -1.50% | -2.15% | -0.42% | 1.87% | 1.62% | 1.33% | 2.96% | 1.30% | |
| Slope of regression line | 0.043 | -0.105 | -0.089 | -0.016 | 0.140 | 0.132 | 0.036 | 0.055 | 0.007 | |
| ¹ Total Outlays includes an Allowance for Future Disaster Costs that is not displayed in the table by category. ² Discretionary outlays include a placeholder for outyear Overseas Contingency Operations that includes some funding that would be categorized as national defense once the placeholder is allocated in the FY 2016 and subsequent Budgets. | ||||||||||
Sources: US Government Printing Office.
