ABSTRACT
In 1929, when the U.S. Gross National Product stood at 103.4 billion dollars, government purchase of goods and services constituted 8.8 billion dollars, or 8.5 percent. By 1980 government purchases had risen to 538.4 billion dollars out of a GNP of 2633.1 billion dollars, or 20.4 percent. Thus by this crudest of measures more than one-fifth of total economic activity was located in the public sector. While over the years the share of government spending has shifted somewhat from the federal to the state and local level, total federal spending as a percent of GNP was 7.4 percent in 1980, the year that Ronald Reagan became president. Between 1980 and 1982 federal purchase of non-defense goods and services rose from 65.8 billion dollars to 78.8 billion dollars. 1 These figures demonstrate that federal non-defense spending rose during Reagan’s first two years from 2.5 percent of GNP in 1980 to 3.0 percent by the end of 1982.
