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The Role of Spending in the Economy
Spending plays a vital role in spurring economic activity and creating growth and jobs. Spending occurs by consumers, investors, foreigners, and government. During economic downturns, government plays an increasingly important role in trying to influence the economy.
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Government spending as a percentage of GDP rises during economic recessions (shaded).
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Average government spending per person varies significantly across countries. The U.S. government spends less per person than governments of other developed countries.
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Combined spending among state and local governments roughly equals federal spending. Total spending among all governments was about $6.4 trillion in 2015. (Values in billions.)
*Federal spending excludes intergovernmental transfers (money given to state and local governments).