How big is the government? This chapter focuses on the question “how big should government be. However, a prior question often is overlooked: How big is the government? In other words, do statistics show that government is getting larger or smaller? Key questions are: How do we accurately measure the changing size of government over time? What are the relative sizes of the federal, state and local governments? Which components of government spending have growth? How does the US compare with other countries? Federal, state, and local government spending was 42 percent of U.S. gross domestic product in 2009, according to data from the Organization for Economic Cooperation and Development . That’s huge! More than 4 out of every 10 dollars of everything produced in America now gets channeled through governments. In the last two years, the recessions and expansionary fiscal actions have boosted the size of governments both here and abroad. The good news is that some advanced nations have substantially cut the sizes of their governments in recent decades, which
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