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Government Spending – National Income and Product Accounts

Government Spending – The BEA’s NIPA Report

The third component (after consumer spending and investment spending) of the BEA’s National Income and Product Account is government expenditures.

Governments spend money on defence, highways, schools, hospitals, interest payments, and many other categories and accounts for roughly 20% of the total GDP figure in the US. Spending can be further divided into federal, state and local levels of spending. Federal spending accounts for the largest of the three. We see that federal spending accounted for roughly half of the total government expenditure in the US. We will see one economic indicator that gives us an indication of government expenditure – The Construction spending release.

Figure: Composition of US Government Spending

Components of GDP - Investment Expenditures

Government Spending – BEA’s NIPA

Lastly we study the net effects of transactions of the United States with the rest of the world.

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