What you’re not hearing about the crisis in federal spending, debt and debt service

Annual federal debt service was a record in 2023 at $658 billion. That is 2.4% of GDP,  the highest since 2000. But it is lower than every one of the 18 years between 1982 and 2000, an era of excellent asset returns. Federal outlays at $6.13 trillion are 22% of GDP, a ratio down from the two prior pandemic-relief years. The ratio was higher from 2009 to 2012, and from 1982 to 1983, years associated with economic expansion, not imminent recession. Federal outlays are greater than government spending at $1.77 trillion, which includes state and local. Transfer payments such as Social Security are spent by individuals, not government. At 6%, the ratio of federal spending to GDP is the lowest since 1950. Even including state and local government spending at 17% of GDP, it's still the lowest since 1950. The prevailing narrative is wrong about recent payroll growth – only a tiny part comes from government jobs. The ratio of government payrolls to total payrolls at 15% is the lowest since 1959. Growth would be best served by even less government involvement, but its current level is not the emergency we sense the consensus believes it is.