http://www.econlib.org/library/Enc/GovernmentSpending.html In most countries government spending has grown quite rapidly in recent decades. The chart shows U.S. federal spending as a percentage of gross national product from 1790 to 1990. As the charts show, the central government's share of the economy was remarkably stable for nearly 150 years but grew quite rapidly throughout the latter two-thirds of the 20th century. Economists trying to explain government spending have recently attributed it to special interest coalitions lobbying the government to transfer wealth to them. The term economists use to describe such lobbying is "rent-seeking." Rent-seeking certainly has grown. The farm program, for example, did not even exist in 1929. It now absorbs about $30 billion a year. The elaborate water control projects in the West cost the general taxpayer a high multiple of the benefits to the relatively small groups of beneficiaries. Both are the result of rent-seeking. "Rent-seeking," therefore, may explain the long, more or less steady rise in government spending as a fraction of GNP. Political rules may limit the government's ability to hand out money to more than a few new pressure groups in each session of Congress. If so, we would expect the long, gradual increase in government spending that we observe. It cannot be said, however, that the data prove this particular theory; in fact, it cannot even be said that this particular theory is a very good one. It certainly does not explain the long level period from 1790 to 1929.
