Enough About High Taxes! Let's Talk About Massive Spending!
So Tax Day has come and gone, except for all of us who have filed extensions or are figuring out how to amend dashed-off returns.
It's useful to document how much we pay in taxes but it's always worth remembering that government spending is only loosely related to how much money a government takes in. For example, in 2009, the United States's tax burden at all levels of government came to just 23.3 percent of GDP. The average for all OECD (or "developed") countries was 33.6 percent.
But as Milton Friedman liked to remind people, the cost of government is best measured not simply by tax levels but by spending levels. And here the data tells a damning story of profligacy. In 2009, OECD data show that the United States came in slightly below average for "general government expenditures as a percentage of GDP." However, when you break that down on a per-capita basis (as is done on the right), a different picture emerges. The U.S. is suddenly among the biggest spenders, shelling out almost $20,000 per person (in 2009 dollars).
Here is something upon which stimulatarians and fiscal hawks might agree: We cannot accurately price the cost of government if we are buying today's services on a super discount. That tank—or mortgage deduction—you're happy to pick up at a 40 percent discount may not seem so necessary if it was actually selling at retail.