Federal Spending Per Household: A Decade of Accelerated Growth

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Increase continued even while average household size declined

Veronique de Rugy’s latest examination of national data highlights the upward and accelerating trend of federal spending on a per household basis – with a blip in the past two years. The Mercatus Center scholar, of George Mason University, adjusted spending figures to remove the impact of measured inflation, and found that in the last decade alone per household spending increased by 38 percent, from $21,891 to $30,174.

Since 2007, government spending per household has skyrocketed by $4,578. This year, the federal government has spent $30,174 per American household. That’s down from the 2009 level of $32,934 due to the end of some increased spending for TARP, Freddie Mac and Fannie Mae that were part of the 2008 financial rescue.

Since 2001, federal spending per household has been on an upward trajectory, deviating from its historical average: in 1985 the federal government spent 36% of the average household’s income; by 2009 this number had skyrocketed to 49%. For context, the mean household income in 2009 was $67,976; at $32,934 per household, government spending represented 48.4% of the average American household’s income in 2009.

The red line tracks the evolution of federal spending per household in the United States since 1985, with all amounts presented in real 2010 dollars for comparability.

According to the Census Bureau, over the 25 year period under examination, the average number of individuals in each household declined by 4 percent, exacerbating the increase on a per capita basis. While the population grew by 29 percent, the number of households increased by 35 percent, and the average number of household occupants fell from 2.69 to 2.57.

Fergus Hodgson is the capitol bureau reporter with the Pelican Institute for Public Policy. He can be contacted at fhodgson@pelicaninstitute.org, and one can follow him on twitter.