At the Idaho Freedom Foundation on December 31, 2024 there is a misleading article by Fred Birnbaum titled Want limited government? Control the spending! He preaches that:
“Legislative leadership needs to set both state and federal (all funds) spending limits so that overall spending does not grow at all in the coming year, meaning a 0% increase in all funds appropriations from Fiscal Year 2025 to Fiscal Year 2026. Is this reasonable? Absolutely!”
Fred has a pair of tables showing how state spending grew from fiscal 2020 to 2025, and how federal spending changed from fiscal 2019 to 2024. He shows a totally unnecessary seven or eight significant figures. Graphs would have been more effective for showing changes. Fred claims that there have been large increases:
“What we see is that state spending, excluding federal dollars, has increased 53% over five years at a compound annual growth rate (CAGR) of 8.8%. Now let’s look at the federal dollars (all federal spending, not just federal dollars for Idaho) for the last five years – note that a one-year offset is used because of differences in fiscal years and the fact that COVID spending first washed through the federal government before hitting the states.
What we see is that federal spending is up 56%, and the CAGR is 9.3%. This means that Idaho is growing spending virtually as fast as the profligate federal government. Who would have thought this?”
Fred summarized those tables with a five-year % increase and a CAGR. But what was going on from year to year?
The graph shown above displays the state spending data. Year to year % increases in spending were 4.75%, 4.64%, 18.6%, 11.5%, and 5.35%. The first two were around 5%, but the next two were much larger. The five-year % increase was 53% and the CAGR was 8.8%.
Another graph shows the federal data he tabulated in red. Year to year % changes in spending were 47.4%, 4.1%, -8.0%, -2.2% and 13.1%. The five-year % increase was 56% and the CAGR was 9.3%. With a huge range of -2.2% to 47.4% the CAGR tells us very little. But Fred did not link to a source for that federal data, so I went looking for one. I found a United States Treasury Department FiscalData web page titled How much has the U.S. government spent this year? which has a graphic titled Government Spending and the U. S. Economy (GDP, FY 2015 -2024 Inflation Adjusted – 2024 dollars. I also have plotted that federal data in blue. It does NOT agree with what Fred tabulated. The five-year % increase only was 23.6% and the CAGR just was 3.9%. But the maximum change, from 2019 to 2020, was by 45.4%. Using the five-year % increase gives a much more modest change of 23.6%, where Idaho spending increased over twice as much as federal spending did!
That Treasury web page has more spending data, back to 2015. All those results are shown above in yet another graph. We can look at 2020, 2021, and 2022 as being a COVID-19 hump. Then we can draw a line with a 5% growth rate through 2018, 2019, 2023 and 2024. A 5% growth rate would compensate for inflation and be much more reasonable than Fred’s zero.
The cartoon with money bags was adapted from this one at Openclipart.
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