Question

Has government slowly gotten smaller since 1980? Collect some data that would measure the size of government. Support your answer with evidence.

Answer 1

FOR the first time in 40 years, the government sector of the American economy has shrunk during the first three years of a presidential administration.

Spending by the federal government, adjusted for inflation, has risen at a slow rate under President Obama. But that increase has been more than offset by a fall in spending by state and local governments, which have been squeezed by weak tax receipts.

In the first quarter of this year, the real gross domestic product for the government — including state and local governments as well as federal — was 2 percent lower than it was three years earlier, when Barack Obama took office in early 2009.

The last time the government actually got smaller over the first three years of a presidential term was when Richard M. Nixon was president. That decrease was largely because of declining spending on the Vietnam War.

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The accompanying charts show the gains in real G.D.P. for the first three years of each presidential administration since 1989. They also show how different parts of government have grown.

Many things other than presidential policies contribute to economic growth, of course, including whether a president has the good or bad fortune to enter office when the economy is already moving in a certain direction.

Bill Clinton took office when the economy was weak and starting to get better, while George W. Bush entered the White House just as a recession was getting under way. The most recent recession officially ended in June 2009, a few months after Mr. Obama took office, but the recovery has been slow.

Of the administrations shown, overall growth in Mr. Obama’s first three years has been the slowest. But that is largely because government spending did not accelerate as it normally does when the private sector is weak. The private sector grew faster in the first three years of the Obama administration than it did in three of the previous five administrations — the exception being Bill Clinton’s administrations, when private sector growth was more rapid. In both of George W. Bush’s terms as well as in the first three years of the George H. W. Bush administration, though, the private sector grew more slowly.

Much of the variation in government spending trends can be attributed to military spending. Adjusted for inflation, it has grown at a slow pace under President Obama despite declines in the costs of the Iraq and Afghanistan wars. Nonmilitary spending has risen at about the same pace as it did during George W. Bush’s second administration, and much more slowly than during his first.

State and local government spending on investments — new schools and highways, for example — has often been subject to abrupt cutbacks in response to a weak economy. But the continued decline in operating expenditures is new. In the past, saving money through such means as laying off teachers has generally been avoided, but the number of education employees at the state and local level has been lower in each of the last three autumns than it was a year earlier.