Government Spending Per Household Exceeds Median Household Income

[Denny Crane]

http://www.sumnerbooks.com/books/view/completely-predictable

As reported in my new book, “Completely Predictable,” the combined spending of federal, state and local governments per American household actually exceeded the median household income for 2010, which is the latest year for which all relevant government data are available.

In fiscal 2010, according to numbers published by the Census Bureau and the Office of Management and Budget (OMB), net spending by all levels of government in the United States was $5,942,988,401,000. That equaled $50,074 for each one of the 118,682,000 households in the country.

In that same year, according to the Census Bureau, the median household income was $49,445.

That means total net government spending per household ($50,074) exceeded median household income (49,445) by $629.

Government in the United States, of course, has not always spent more per year than the median household earns. As recently as 2000, the relationship between government spending and household income was dramatically different.

Data from the Census Bureau and the OMB show that in that year net spending by all levels of government was $3,239,913,876,000. That equaled $29,941 for each of the nation’s then 108,209,000 households. In 2000, the median household income was $41,990.

Thus, between 2000 and 2010, government in this country went from spending $12,049 less than the median household income to spending $629 more.

 

[EL PRESIDENTE]

Well, Obama's latest budget is more tax increases and increased spending! Also, kicking the can down the road for the sequester for sometime later.

 

[jlprk]

As recently as 2000, the relationship between government spending and household income was dramatically different.

Data from the Census Bureau and the OMB show that in that year net spending by all levels of government was $3,239,913,876,000. That equaled $29,941 for each of the nation’s then 108,209,000 households. In 2000, the median household income was $41,990.

2000...2000...something about that year...what happened then?

It says that since then, household income has hardly risen while government spending accelerated...Hey Denny, want to argue about Bush and the tax cuts and the wars you like to defend?

 

[jlprk]

And thanks for the link. I'll use it.

Republicans keep attacking themselves, thinking they're attacking Democrats.

 

[EL PRESIDENTE]

2000...2000...something about that year...what happened then?

It says that since then, household income has hardly risen while government spending accelerated...Hey Denny, want to argue about Bush and the tax cuts and the wars you like to defend?

Dot com bubble burst.

 

[jlprk]

Investors lost confidence when the party in power was going to change.

 

[jlprk]

Bush spending like a drunken sailor had nothing to do with his blowing through a $200 billion surplus 3 months before 9/11.

 

[mook]

Why is median household income useful? The average household isn't where the government typically gets its revenue in taxes.

Say our government serves 100 people. 47 of those people pay $0 in taxes. 43 pay $10 in taxes. 9 pay $20 in taxes. 1 pays $40 in taxes, because he's vastly richer than everybody else (and is increasingly so every year).

Overall, the government rakes in $60, or $.60 for each of the 100 people.

Now pretend the average person earns $.50/year. Does it really say bad things about our tax policy that government taxes $.60 when the average person earns $.50?

Not really. This is just a side effect of increasing income inequality. We should really look at mean income, not median.

 

[Denny Crane]

Why is median household income useful? The average household isn't where the government typically gets its revenue in taxes.

Say our government serves 100 people. 47 of those people pay $0 in taxes. 43 pay $10 in taxes. 9 pay $20 in taxes. 1 pays $40 in taxes, because he's vastly richer than everybody else (and is increasingly so every year).

Overall, the government rakes in $60, or $.60 for each of the 100 people.

Now pretend the average person earns $.50/year. Does it really say bad things about our tax policy that government taxes $.60 when the average person earns $.50?

Not really. This is just a side effect of increasing income inequality. We should really look at mean income, not median.

Median isn't the same thing as average.

It's the mid point of all household earnings. So you can say that exactly half the households make $49,445 or more, and half make less than that.

And the issue is spending, not taxing.

For what the government spends, it could simply write every household a check and nobody'd have to work and everyone would live as good as half the people already do.

 

[mook]

For what the government spends, it could simply write every household a check and nobody'd have to work and everyone would live as good as half the people already do.

...except we'd have no roads, no national defense, no....nevermind. It's pointless trying to point out what government does to a libertarian.

It's the mid point of all household earnings. So you can say that exactly half the households make $49,445 or more, and half make less than that.

So say in 2000 99 people earned $5, and one earned $100, the median income is $5.00. Pretend we coincidentally have $5 in government spending.
Then in 2010 99 people earned $4, and one earned $110. The median income has now dropped to $4.00 Pretend we now have $6 in government spending.

This is what this article is describing. You think the problem is that it's now $6 instead of $5 in spending. I think the 99 people should be wondering what happened to make their income go from $5 to $4 while the one guy went to $110.

 

[Denny Crane]

...except we'd have no roads, no national defense, no....nevermind. It's pointless trying to point out what government does to a libertarian.

You'd pay tolls to use roads. National defense was paid for with tariffs for 150 years. Even so, we pay gasoline tax to pay for the roads. I'd be satisfied if that's all we paid.

So say in 2000 99 people earned $5, and one earned $100, the median income is $5.00. Pretend we coincidentally have $5 in government spending.
Then in 2010 99 people earned $4, and one earned $110. The median income has now dropped to $4.00 Pretend we now have $6 in government spending.

This is what this article is describing. You think the problem is that it's now $6 instead of $5 in spending. I think the 99 people should be wondering what happened to make their income go from $5 to $4 while the one guy went to $110.

LOL. Envy!

Wrong reasoning, though. You did get the part about median income going down. But it went down by 10% while govt. spending went up by 100%.

Maybe we should be wondering why that sucking sound is all our money going to Washington D.C. and why govt. employees are making well over the median income while we suffer, and why the richest neighborhoods in the country are those surrounding D.C.

 

[blazerboy30]

Why is median household income useful? The average household isn't where the government typically gets its revenue in taxes.

Say our government serves 100 people. 47 of those people pay $0 in taxes. 43 pay $10 in taxes. 9 pay $20 in taxes. 1 pays $40 in taxes, because he's vastly richer than everybody else (and is increasingly so every year).

Overall, the government rakes in $60, or $.60 for each of the 100 people.

Now pretend the average person earns $.50/year. Does it really say bad things about our tax policy that government taxes $.60 when the average person earns $.50?

Not really. This is just a side effect of increasing income inequality. We should really look at mean income, not median.

The top 25% of earners have increased earnings by 25% since 2000. Total government spending has increased by 83% since 2000.

I don't understand the rest of your post since your first line says we shouldn't care about median or average. But your last line says we should care about mean, which is the same thing as the average.

 

[EL PRESIDENTE]

Investors lost confidence when the party in power was going to change.

actually, the FED increased the interest rate which tightened up all the loose money. plus the dot com was a bubble created by monopoly money and bad ideas. history is basically going to repeat itself, but much worse. the same thing is happening.

all this is another indication that inflation is coming. real houshold income isn't increasing, but costs are. you can see it when you go to the store. the inflation index from the government is BS, as is most things (i.e. unemployment stats)

 

[jlprk]

If you add all the computer startup money, either invested or profits or both, it was a drop in the bucket compared to the national expansion of wealth under Clinton. The dot com theory is Republican propaganda. The cause of the Clinton surplus was that Clinton reversed Reagan's tax cuts for the rich back up to where they had always been.

 

[EL PRESIDENTE]

which was unsustainable, which is why the economy went to shit once interest rates went up.

 

[Denny Crane]

If you add all the computer startup money, either invested or profits or both, it was a drop in the bucket compared to the national expansion of wealth under Clinton. The dot com theory is Republican propaganda. The cause of the Clinton surplus was that Clinton reversed Reagan's tax cuts for the rich back up to where they had always been.

And bazillions of jobs were saved. Ask Obama!

 

[blazerboy30]

If you add all the computer startup money, either invested or profits or both, it was a drop in the bucket compared to the national expansion of wealth under Clinton. The dot com theory is Republican propaganda. The cause of the Clinton surplus was that Clinton reversed Reagan's tax cuts for the rich back up to where they had always been.

As usual, you just completely made up a statement and tried to pass it off as fact.