We all scoffed back in 1996 when President Bill Clinton declared “the era of big government is over.” After all, inflation-adjusted government spending climbed during the Clinton years, and it has exploded on George W. Bush’s watch. In his first five budgets, Bush increased real discretionary spending by more than 35 percent, the largest boost observed since modern budget rules were adopted in the mid-1960s.
Yet Clinton was right by at least one measure —and not just about the United States. As Johnny Munkhammar of the libertarian Swedish think tank Timbro documents in European Dawn: After the Social Model, government spending as a percentage of gross domestic product fell in most developed countries between 1993 and 2003.
Graph (not available online): Government Spending as a Percentage of GDP, 1993 and 2003