Has domestic spending risen?

We cannot have a sensible dialogue on fiscal policy unless we are honest in our definitions and facts.  There is of course a great deal of uncertainty about the future, but at least with respect to the past, we should be able to arrive at a rough agreement about what has happened.  Apparently not.

Ethan Pollack of the Economic Policy Institute has recently written a blog on the “myth” of rising domestic spending.  You might think from the title of the blog that domestic spending has not risen, at least in real terms.  You would be wrong.

The deception lies in a clever use of definitions.  First Pollack omits all defense spending.  Fair enough since defense and domestic spending are commonly separated in many budget analyses.  Moreover, when conservatives complain about rising spending, they often have a blind spot for defense.  He does, however, use an aggressive definition of defense spending including veterans benefits and homeland security.

Not content with that, Pollack also omits all major entitlement spending.  The justification for this seems to be that this spending is driven by health care costs and demographics.  Of course education spending is also driven by demographics, but this is apparently kept in.

Unfortunately, even this minimalist definition of domestic spending has risen over time.  So Pollack then defines spending as being spending as a share of GDP.  Here at least spending has not risen at least not if you begin your analysis around 1974 or so.  It also helps if you include CBO projections that assume discretionary spending will be help far below its historic growth rate.

“Domestic spending” is not the same as “nondefense domestic discretionary spending as a share of GDP,” at least not to most people.