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Right out of the starting gate, President Obama has been pushing hard for his proposed $825 billion stimulus package, which has been passed in the House and is now working its way in the Senate. In all the debate over whether it will work or not, little attention has been paid to the actual historical magnitude of this spending program.
The table, below, lists the 20 nations with the largest Gross Domestic Products (GDP) in the world. If the planned stimulus package were thought of as a separate country, its size would make it the 15th largest economy in the world, ranked just below Mexico and above Australia.
Source: World Bank
The stimulus package is virtually equal to the combined GDP’s of the following Eastern European countries: Poland ($420 billion), Czech Republic ($168 billion), Ukraine ($140 billion) and Hungary ($138 billion).
It is also bigger than the combined GDPs of the four largest economies in Africa: South Africa ($277 billion), Nigeria ($166 billion), Algeria ($135 billion), and Egypt ($128 billion). And it is almost as large as the combined GDPs of the four biggest South American economies: Argentina ($262 billion), Venezuela ($228 billion), Columbia ($171 billion) and Chile ($161 billion).
Closer to home, the $825 billion stimulus price is larger than U.S. Defense Department spending ($760 billion) in 2008 through the third quarter. It is far more than twice as large as all consumer spending on clothing and shoes ($375 billion), double all private consumption expenditures on furniture and household equipment ($411 billion), and twice as big as all consumer spending on transportation ($377 billion).
At least half of the government stimulus is meant to directly create 4 million jobs over the next two years. Assuming this target was hit, the government would be spending more than $100,000 per worker.
According to the U.S Census Bureau, in 2007, U. S. median household income was $50,200. Thus the government will be expending double the average household income for every job it tries to create.
When combined with the $700 billion bailout package approved last year and already half spent, total additional government deficit spending for these two programs, alone, will be more than $1.5 trillion this year and next.
With a U.S. population of around 305 million people, this represents an additional per capita federal debt burden on every American of more than $4,900. There are about 140 million taxpayers in America, so this $1.5 trillion is equal to a new per capita burden on each of them of about $10,700.
From any number of perspectives, what the president and the Congress are planning to implement represents one of the most massive experiments in “activist” government policy ever undertaken outside of war.
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