Government spending vaults past income

Powerline blogger John Hinderaker  has a link to an interesting chart from the website Political Calculations illustrating the relationship between federal government spending and median household income.

It shows a pretty steady relationship between 1967 and 2000, except for a blip indicating an increase in the proportion of federal spending from 1990 to about 1995. That coincides with the savings and loan crisis, when the government was spending heavily to pay off insured depositors in failed savings and loans. But from 2000 to 2007 the proportion of federal spending increases sharply, as those who want to decry the policies of the Bush administration and Republican majorities in Congress will note with glee. Starting in 2007, federal spending rises hugely, while median household income doesn’t rise at all.  Interestingly, we don’t see anything like this in any of the recession years between 1967 and 2000.

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