#1 US Government Entitlement Spending by ThirstyMan 27.05.2015 07:31


May 27, 2015 compiled by Christopher Chantrill

Chart Key:
- Welfare spending
- Healthcare spending
- Pension spending

Entitlement Spending — considered as government pensions, healthcare and welfare — started out at the beginning of the 20th century at 0.4 percent of Gross Domestic Product (GDP). As you can see from Chart 2.81, entitlement spending was negligible until the Great Depression of the 1930s.

In response to the Great Depression President Roosevelt and the New Deal cranked up welfare spending to 1.5 percent of GDP by the mid 1930s and over 2.0 percent on the eve of World War II in 1940.
In 1950, entitlement spending had reached 3.3 percent of GDP, mostly welfare, but by 1960 entitlement spending had reached 5 percent of GDP as Social Security spending started to ramp up.

In 1965 Congress passed Medicare, Medicaid and the Great Society programs, and entitlement spending exploded, breaching 11 percent of GDP in 1976.

By the early 1980s, entitlement spending reached 13 percent of GDP and pensions spending stabilized at a little over five percent of GDP, with welfare spending stabilized at three to four percent of GDP. But healthcare spending sustained a steady rise, from three percent of GDP in 1980 to five percent of GDP in 2000.

Since 2000, entitlement spending has increased, peaking briefly at 18 percent of GDP in 2010, with pension spending at 6.4 percent of GDP, health care at 7.3 percent GDP and welfare spending at 4.5 percent of GDP in the aftermath of the Great Recession of 2007-09.

In the 2010s welfare spending has contracted but health care and pensions spending has increased. In 2015 pension spending is estimated at 6.8 percent GDP, health care spending is estimated at 7.5 percent GDP, and welfare spending is estimated at 2.6 percent GDP.

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