Most of us don’t much care for our insurance broker.

Daily, I pose questions that I can't definitively answer. Usually it happens when I am driving about, between meetings, some quiet moment when I am not connected. I usually have a working hypothesis for the question but I can't answer the question without research. But other activities intervene and the research doesn't get done and the question remains unanswered. Then, sometimes, I get lucky and someone turns up with the answer.

So the other day I was pondering the apparent conundrum of the government budget ballooning while the number of government employees declines. Yes, improbable as it seems, it has; some 600,000 (A Record Decline in Government Jobs: Implications for the Economy and America's Workforce). My conclusion was that in order for this to be true, income transfers/entitlement programs must be rising as a percentage of all government expenditures. And then, as if to answer that speculation - What Is Driving Growth in Government Spending? by Nate Silver. And the answer is:

It’s one of the most fundamental political questions of our time: What’s driving the growth in government spending? And it has a relatively straightforward answer: first and foremost, spending on health care through Medicare and Medicaid, and other major social insurance and entitlement programs.

[snip]

In the long run, the overall economic health of the country is the most important constraint on fiscal policy. A growing economy gives us a lot of good choices: maintaining or expanding government programs, cutting taxes or holding them at a moderate level, reducing or managing the national debt. A stagnant economy means that everything gets squeezed

[snip]

That means most of the growth in federal government spending relative to inflation — and essentially all the growth as a share of the gross domestic product — has been because of the increased expense of entitlement programs.

He illustrates with this striking graph.

Silver concludes:

Slowing the growth of entitlement spending will not be easy. Particularly in the case of health care, it has become substantially more expensive for individuals with both public and private insurance to purchase the same level of care.

And on a political level, cuts to entitlement programs are liable to be more noticeable to individual voters than cuts to things like infrastructure spending. A 10 percent cut to Social Security or Medicare benefits will surely draw the ire of voters. A 10 percent reduction in the amount allocated to bridge repair, or in the amount of government-sponsored energy research, will affect individual citizens less directly (even if they are perhaps ultimately more economically damaging: most of the academic literature is supportive of high long-run returns to infrastructure and research and development spending on private-sector productivity and economic growth).

Nevertheless, the declining level of trust in government since the 1970s is a fairly close mirror for the growth in spending on social insurance as a share of the gross domestic product and of overall government expenditures. We may have gone from conceiving of government as an entity that builds roads, dams and airports, provides shared services like schooling, policing and national parks, and wages wars, into the world’s largest insurance broker.

Most of us don’t much care for our insurance broker.