Long-term victory: social safety net still expanding, passes 30% of GDP for first time ever

by: Chris Bowers

Wed Mar 10, 2010 at 09:30


Public expenditures on social programs--health care, pensions, transportation, housing, education, unemployment assistance--have risen sharply as a percentage of GDP over the past two years.  In fact, for the first time in history, public social spending in the United States has surpassed 30% of GDP.

Here is a chart with the details on the spending.  The figures taken from usgovernmentspending.com (which is unfortunately a teabagger site, but still has good data).  The chart includes figures for all levels of government--federal, state and local.  It only looks at social investment programs, rather than things like defense and interest on the debt:

Social safety net spending as a percentage of GDP, by category, 1970-2010

About 30% of the increase over the last two years comes entirely from increased public expenditures on unemployment.  Another 15% comes from an increase in public spending on pensions.  A bit more comes from the recession itself, as GDP has not increased much even in absolute terms over the past few years.

Still, the chart suggests that progressives are making real advancements in expanding the social safety net in America.  About half of the increases come from non-recession, non-demographic related areas like health care, education, and the "other spending" category that focuses on a wide variety of public services (environmental protection, scientific research, housing, water, communications, waste management, etc)  Further, even with the projected end of the stimulus, the end of the recession (at least in GDP terms), and increase in employment, the long-term forecast is for social investment spending to stay above 30% indefinitely.

The New Deal regulatory structure has indeed been gutted, and union density has declined markedly since the mid-20th century.  These twin developments have played major roles in the rise of wealth inequality in the U.S..  However, conservatives not only failed to gut Great Society and New Deal social safety net programs, but those programs continue to expand.  

In 1940, under FDR, public social investment spending was less than 14% of GDP, far less than it is today.  No matter how frustrating the fights may be, we are indeed making progress.

Chris Bowers :: Long-term victory: social safety net still expanding, passes 30% of GDP for first time ever

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Long-term victory: social safety net still expanding, passes 30% of GDP for first time ever | 12 comments
Interesting to see where an increase happened. (0.00 / 0)
And obviously, pensions and health care are the main drivers, responsible for more than 9% of the increase! Hmm, looks like the government has been more generous at providing its employees a nice retirement. This begs the quetion why there is a seperate system at all, and not simply everyone enrolled in social security.

Regarding health care, the rising costs certainly aren't reflecting bbetter care, but simply follow the cost explosion in that sector. Welfare obviously is depening on the economical situation, and so the higher share now isn't really evidence of more progressive policies, but of the high unemployment. What's impresive is the recent increase of the edducation budget, a nice departure from the stagnation of the bush years. But transport actually has  constantly shrunk in its share! No surprise then that the infrastructure is in such a bad shape.

But what's hidden in "other"? At almost 4%, this still is billions of dollars. What for?

It would seem to me the the expanding poverty (4.00 / 2)
resultant from supply side economics and internationalism are probably more the cause of increased "social safety net" spending than is the success of progressive politics.  On the other hand, if it were up to the proponents of unregulated capitalism, we would just close down our social safety net operations, or perhaps outsource it.  

"Oh. My. God. .... We're doomed." -- Paul Krugman
http://krugman.blogs.nytimes.c...">http://krugman.blogs.nytimes.c...">http://krugman.blogs.nytimes.c...
[ Parent ]
nt (4.00 / 2)
1. Which specific graphs did you get this data from?  It's hard to evaluate an argument like this without knowing more.

2. The data for 2008 to 2010 for state and local levels is 'guesstimated' by the site.  The method is not provided that I could see.  http://usgovernmentspending.bl...

3. Why is transportation included here?  I don't know what falls under this, but to me highway and construction are infrastructure, not part of the social safety net.

4. Spending is not equivalent to provision of a safety net, though it's useful that their data takes into accoutn federal, state, and local spending.  It would be interesting to hear from someone who would know how reliable the census figures are for state and local spending.  But that aside, one could make a reasonable argument that health insurance company profits should be deducted from this spending in terms of accounting for public spending.  And other examples as well.

The base question is to what extent a safety net is being provided, to whom, and how effective is it?  If you contrast the 1996 welfare reform with the Medicare prescription drug benefit, one could make the argument that this was a net loss in terms of social safety net provision because some of the most vulnerable people were cast off.  

So your argument could be right, could be wrong, but it's hard to tell from what's presented.  For example, how does it square up with this OECD data for 2001, which says the U.S. safety net is 8% of GDP, not 24%.  I don't know whether the the OECD hasn't included state and local spending or whether there is some cooking of the books going on in the way the data is assembled in the U.S. spending or simply a reflectino of different understandings of what a social safety net is by the two sources.

However, I'd caution against casually relying singly on the data of a site that is devote to highlighting that the U.S. government spends too much without looking more carefully at the issue.  

I think Chris was just introducing us to an interesting (4.00 / 1)
if not biased source of information that is not readily available in such a cogent format.  He quickly identified it as being from a right wing source.  You are correct, if one was to use this information for anything more than speculation, it should be varified.

"Oh. My. God. .... We're doomed." -- Paul Krugman
http://krugman.blogs.nytimes.c...">http://krugman.blogs.nytimes.c...">http://krugman.blogs.nytimes.c...
[ Parent ]
well (0.00 / 0)
if comparable numbers from this source and another for one year are 8% and 24%, and the second one is somewhat reputable, I think it needs to be verified here and now.  We're not talking about minor differences here, and this argument can SO easily be converted into fodder for cutting government safety net programs - which would be disastrous if the data he's relying on is wrong.  The whole post relies on it.  If you want successes, there are other examples of success to point to (e.g. that social security still exists after what?  70 years and consistent heights of craziness by rightwingers?).

I think it's as a result important to be careful, but to each his/her own.

[ Parent ]
Again I think that Chris has an inner exuberance for numbers (4.00 / 1)
And in his enthusiasm to enlighten us and fill the pages of Open Left he has introduced us to some raw data from a suspect source.   I think that you and Paul in comments below:

What's more, social spending always goes up as a percent of GDP during a recession--and this one is a real doozy--so that in itself isn't a proof of progressive political success.

make very a very salient, if not obvious, point that this is only a reflection of one unsubstantiated and probably flawed source.   I seriously doubt that any significant national policy change will occur because of Chris' post.  

I thank Chris for showing me that the Right is compiling data to substantiate their desire to further destroy the commons.

"Oh. My. God. .... We're doomed." -- Paul Krugman
http://krugman.blogs.nytimes.c...">http://krugman.blogs.nytimes.c...">http://krugman.blogs.nytimes.c...

[ Parent ]
More and better social spending (4.00 / 3)
It's good to see that there is more social spending than in the past, but we also need better social spending. As Gray says, much of the growth in healthcare spending is just going to make health insurance company CEOs richer, not to actually make ordinary people healthier. The US spends twice as much per person on healthcare as most other developed countries, yet our health indicators are worse than most.

More is also being spent on testing students, but not necessarily on teaching them. The fact that large numbers of people are confused about evolution and global warming and so easily duped by right-wing shysters indicates that our education system is pretty poor (and can't resist the massive propaganda machine of television). And "ending welfare as we know it" didn't actually help very many people -- it just pushed them to rely on food banks and the underground economy. Increasing wage inequality means that more must be spent just to make up for the fact that a lot of people are not earning a living wage. More is spent, but the outcome is worse than before.

Weird way to measure progress. (0.00 / 0)
Are we safer if some army procurement officer decides to pay $800 a piece for toilet seats just because it increases military spending?

Are we better off when someone wrecks their car just because it increases GDP?

About 30% of the increase over the last two years comes entirely from increased public expenditures on unemployment.  Another 15% comes from an increase in public spending on pensions.  A bit more comes from the recession itself, as GDP has not increased much even in absolute terms over the past few years.

It seems like Chris should subtract out the parts of his calculation of "progress" that are actually measures of how shitty things are.

miasmo.com

[ Parent ]
Color Me Unconvinced (4.00 / 4)
With state and local governments slashing their budgets by hundreds of millions of dollars over the past two years--and an equal amount still to come--this really does not compute.  Public education is taking a huge portion of the hit in these cutbacks, along with social services.

dr anonymous is right to point out the state & local "guestimates" involved, as well as the inclusion of transportation.

What's more, social spending always goes up as a percent of GDP during a recession--and this one is a real doozy--so that in itself isn't a proof of progressive political success.

Gotta go now, or I'd say more.  I'll just leave it at this: It certainly is true that we've come a long way since FDR. But right now, we're heading in the wrong direction, despite what these numbers seem to say:  education's being cut as never before, and forces are gathering to cut Social Security and Medicare drastically over the decades ahead.

We are in peril.  Period.

"You know what they say -- those of us who fail history... doomed to repeat it in summer school." -- Buffy The Vampire Slayer, Season 6, Episode 3

Numbers need a workout (0.00 / 0)
You'd want at least to make some attempt to segregate, for the various categories, the components of spend relating to:

- the base system (ie, the effect of increases already provided for under current law)

- numbers covered (under the rules of current law) (eg, the effects of the changing economic situation and the aging population on social security and health care spend)

- differential costs (eg, health care, where we know that, on a per capita or per procedure, basis, costs are increasing for output of equal quality)

- genuine extensions, by changes in legislation, of coverage to new groups and of quality of coverage.

I suspect most folks would doubt whether that last category accounts for much of the increase, but that's no reason not to get the numbers.

[ Parent ]
Hard Work (4.00 / 1)
I suspect most folks would doubt whether that last category accounts for much of the increase, but that's no reason not to get the numbers.

Raw number tables--heck, even well-cooked number tables--are never going to give you this kind of answer.  That's why god invented research reports and the like.

But even that is not always such a good indication, since we all know that the Medicare drug benefit was a major extension via change in legislation, but we also know that it was structured to benefit the drug makers more than to benefit the "beneficiaries."  So how does one take that into account?

"You know what they say -- those of us who fail history... doomed to repeat it in summer school." -- Buffy The Vampire Slayer, Season 6, Episode 3

[ Parent ]
No time to rest (4.00 / 2)
Our social safety net particularly when it comes to long-term unemployment is woefully inadequate.  We need find better solutions.  One solution is a Job Guarantee.

RebelCapitalist - Financial Information for the Rest of Us.
Long-term victory: social safety net still expanding, passes 30% of GDP for first time ever | 12 comments
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