Government for the People: On the Determinants of the Size of U.S. Government

Author/Editor:

Tamim Bayoumi ; Fernando M. Gonçalves

Publication Date:

December 1, 2007

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

Trends in the size of U.S. government are examined. In the postwar period, general government primary spending rose by ¼ percent of GDP a year through 1975, stabilizing thereafter. With higher social transfers offset by a lower burden of defense spending, expansion reflected a baby-boom driven rise in education spending. The parallel improvement in tax efficiency helped equate the benefits of higher spending with the costs from higher taxation, in accordance with a marginalist view of the size of government. Looking forward, the retirement of baby boomers appears likely to expand government and lead to a more efficient tax system.

Series:

Working Paper No. 2007/289

Subject:

English

Publication Date:

December 1, 2007

ISBN/ISSN:

9781451868524/1018-5941

Stock No:

WPIEA2007289

Pages:

31

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