Econbrowser: The "Ever-Expanding" Government Sector, Illustrated (Part II)

Econbrowser: The "Ever-Expanding" Government Sector, Illustrated (Part II):

"Notice that government transfers as a share of GDP looks particularly high because of the collapse of GDP in the Great Recession which started in 2007Q4. Normalizing by potential GDP highlights the fact that, while the ratio is the highest over the last forty three years, it is only slightly higher than that recorded in the mid-1980s, during the Reagan administration.

Normalizing government consumption and investment illustrates that overall spending by the government in purchases of goods and services is not particularly high. Even dividing by nominal GDP indicates that we are only (almost) back to the levels of 1990. Normalizing by potential GDP indicates that we are still only back to the levels of the early 1990's (this spending includes defense)."

http://www.econbrowser.com/archives/2010/10/the_everexpandi_1.html

Are These The Real Republican Principles?

Op-Ed Columnist - A Sin and a Shame - NYTimes.com:

"The recession officially started in December 2007. From the fourth quarter of 2007 to the fourth quarter of 2009, real aggregate output in the U.S., as measured by the gross domestic product, fell by about 2.5 percent. But employers cut their payrolls by 6 percent.

 In many cases, bosses told panicked workers who were still on the job that they had to take pay cuts or cuts in hours, or both. And raises were out of the question. The staggering job losses and stagnant wages are central reasons why any real recovery has been so difficult.

 “They threw out far more workers and hours than they lost output,” said Professor Sum. “Here’s what happened: At the end of the fourth quarter in 2008, you see corporate profits begin to really take off, and they grow by the time you get to the first quarter of 2010 by $572 billion. And over that same time period, wage and salary payments go down by $122 billion.”

 That kind of disconnect, said Mr. Sum, had never been seen before in all the decades since World War II."

http://www.nytimes.com/2010/07/31/opinion/31herbert.html?th&emc=th