Looking for a Goldilocks Government...Just the Right Size

Size of government as a percent of GDP is one important variable.  Whether a nation's leadership has the courage to collect the taxes to pay the bills it votes to incur or chooses to run deficits and build debt leading eventually to taxation through inflation is another issue entirely.  The data in this posting focus only on the size question.  (Click on the charts for high resolution versions.)

Total government in the United States, federal, state, and local, has grown from around 20% of GDP to more than 35% over 65 years.  Major influences are pointed out in the yellow boxes.

Size of government in most Western European countries is commonly around 50% of GDP, about 20% higher than in the US.  Most developing and dynamic economies are more like the US was in the dynamic 1950's, government consuming less than 30% of GDP.  The chart below shows the numbers for selected countries from Heritage Foundation data.  Their calculation must be different in some way since I can't account for the 42.2% they report for the USA, but I assume their numbers are calculated the same way for all nations and allow fairly accurate comparisons.  The chart clearly shows why big government folks say, "Don't worry," and why folks who argue that success lies with more of the wealth in the private sector say, "Worry!"  Right now the Big Government folks have the upper hand.  I'm not interested in shutting down the government, but I'd like to see a little of that 1990's restraint come into play to swing the pendulum a bit in the direction of fiscal conservatism.

I'd also like to see us tighten our belts a bit and start paying the bills as we go.  Inflation will be a killer if we don't.

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