More vs less, guns vs butter part 2

A reader writes to say that the Heritage Foundation charts in the first post graphically overstate the actual growth of the federal government over time. “I have a problem with the Heritage Foundation. They have an axe to grind and they show by never showing a jey chart which is compares nominal federal spending to nominal GDP. I didn’t have time to search much, but I found this: http://www.truthandpolitics.org/outlays-per-gdp.php As you can see, the line is kind of flat though rising slightly. It looks much less scary than the charts of the heritage. In a growing economy, Federal spending is going to trend up and to the right. The Heritage people just want it to stop and go down.”

The information is sourced from this OMB document and the relevant paragraph says:

“During the 1930s, total Federal receipts averaged about 5% of GDP. World War II brought a dramatic increase in receipts, with the Federal receipts share of GDP peaking at 20.9% in 1944. The share declined somewhat after the war and has remained between 16% – 20% of GDP during most of this time. In recent years, receipts have increased as a share of GDP — from 17.5% in 1992 to 20.9% in 2000, dropping back to 16.5% in 2003. There have been some significant shifts during the post-war period in the underlying sources or composition of receipts.”

And here’s the supporting table.

The reader continues: “The US Budget deficit reached almost much higher levels during WW2. Plus, as we have learned in the current financial crisis and from Taleb, predicting the future is just a fools game so the whole premise of this chart is absurd. It assumes everything stays the same, no has agency to change anything or react, no market reaction occurs, etc, etc…”