Seeing government spending

Date posted: November 14, 2011

Government spending is a topic that interests almost everyone. And, as N.C. State University economist Mike Walden reports, what government spends money on influence how we react to that spending.

“You can really divide government spending into two broad categories: first, government spending on things we can all see and use — roads, bridges, schools, even the military — but then there’s also government spending on programs that go to paying people — individual households — either money or paying for services that they receive. A good example of this … would be Social Security, Medicare and Medicaid.

“And the trend that we’ve seen … over the last really 50 years is that government spending on things that all of us can see — roads, bridges, schools, et cetera — as a percent of the economy has gone down, while government spending on programs that help particular, specific individuals and households has gone up.

“And so some draw a conclusion from this in saying that perhaps one reason — not the only but one reason — why some people are dissatisfied with government spending is they don’t see as much of it going to things that all of us use and all of us can see. It’s sort of hidden, because it’s going only to individuals like retirees or folks whose medical care who can qualify for that.

“So, I think this is an important issue, and I think it does point out that how and where government spends its money does have an impact on how people perceive that.”

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