NCPA - National Center for Policy Analysis


July 12, 2004

The Cost of Government Day is the point at which the average American has earned enough to pay off his or her share of the burdens of government. It includes costs imposed by federal, state and local spending, and the burdens of complying with various regulations.

Thanks to the Bush tax cuts, the day arrived 24 hours earlier this year (July 7) than in 2003. But partly due to boosts in nondefense discretionary spending over the past four years, the news isn't as good as it sounds: According to a report by Americans for Tax Reform on the report:

  • From 1992 to 2000, the Cost of Government day fell from around July 19 to June 28, a decline of approximately three weeks; this was due to relatively sluggish increases in federal spending and dramatic increases in national income.
  • But since 2001, nondefense discretionary spending has risen 25 percent; these increases, combined with more defense spending to pay for the wars in Afghanistan and Iraq, plus a recession and the September 11 terrorist attacks, mean that the average American works nine more days to pay off the cost of government than he or she did in 2000.

According to ATR:

  • In just the past three years, federal increases are 3.5 times the amount spending increased in the previous eight years combined.
  • These increases in federal spending account for 83 percent of the increase in the Cost of Government day since 2000.
  • The average American worked 21.2 more days from 2000 until 2004 just to compensate for more federal spending.

Had the Bush tax cuts not gone through, the Cost of Government day would have fallen even later in 2004: on July 9. Government costs now consume 51.6 percent of national income.

Source: Editorial, "2008 time draft," Washington Times, July 12, 2004.

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