A United Kingdom spending update

I had no idea that UK public spending had risen from 36.6% in 2000 to the 50% range until this post by Tyler Cowen

Remarkably, public spending actually went up last year as a share of our national income, according to a devastating analysis by the OECD.

In a spreadsheet buried deep on its website and annexed to its latest Economic Outlook, it says that public spending hit 49pc of UK GDP last year, a shocking increase on the 48.6pc of GDP spent by the state in 2011.

You should note that differing figures from the UK government show somewhat of a decline in spending in real terms, unlike this estimate.  It would be interesting to read a detailed explanation of why the OECD figures differ.

I would also note that, according to these estimates, UK public spending was 36.6% of gdp in 2000, and had edged up over 50% by 2009 and 2010 and now is still in the range of 49% or so.  Most of the run-up came over the bubbly years of 2000-2006.  Let’s start by calling that an unsustainable mistake.  I would say that, looking back, they didn’t get very much for this spending boost, did they?  That’s fact #1 that should start off any analysis of British fiscal policy looking forward.

(…) 

Still, these numbers should be put on the table.  Instead, I very often see these numbers being swept under the proverbial rug.  Perhaps it is believed they might confuse people.

(Via Marginal Revolution.)

2 thoughts on “A United Kingdom spending update

  1. Martin Burkle

    So the US government spends more than it takes in. What percent of the US GDP is government spending?

Comments are closed.