Spending has been between 33%-44% of GDP over the past 50 years. Right now it’s around 38%, a high level but not historical high.

What is historically high is the debt to GDP which recently crossed 100%. Relative to GDP, debt has been increasing faster than spending, which implies a revenue problem.

Not to say there isn’t wasteful spending.

The real issue though is revenue. Spending is likely to only increase as the demographics shift and the elderly population represents a higher proportion of the total population. Spending on health-care and other senior-related services will skyrocket. To prevent debt from ballooning, the government will need to bring in more revenue (and cut back in certain areas).

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