State and Local vs Private Sector Spending

The below chart by Mercatus Center Research Fellow Matt Mitchell uses data from the Bureau of Economic Analysis to analyze the evolution of state, local, and private spending since 1950.  Shown below is the spending level for each year from 1950 to 2009, represented as an index using base year 1950.  Put differently, this chart compares spending by state and local governments to spending in the private sector by graphing all spending in terms of its 1950 level. The differences are startling: since 1950, private spending has increased 5-fold while state and local government spending has increased nearly 10-fold.