Caveat emptor: The Wall Street Journal tosses out some interesting numbers, some of which are wrong.

I was recently embarrassed by quoting some statistics from the Wall Street Journal that were completely wrong. (I'm not saying which ones.) The WSJ people seem to be doing this more often than in the past. Perhaps there are fewer experienced editors and perhaps reporters are more rushed than they used to be.

In today's WSJ, an article ("Budget Cuts Fuel Monetary Policy Clashes," p. A2.) discusses how declining government revenues combined with rising transfer payments are turning the Federal budget into transfer payments only. Here is the graph:

The article states "Consumption and investment by all governments -- local, state and federal combined -- dropped to 17.6% of gross domestic product in the fourth quarter of 2015, matching its lowest level in 66 years, according to the Commerce Department." The fact is that the 17.6% number is for the federal government alone. But it's worse than that. The 17.6% figure is the approximate number for 2014 federal government tax receipts. Federal outlays in that year were 20.4% of GDP. So the graph relates federal tax receipts (not expenditures) to transfer payments. (The point that transfer payments are devouring the federal budget is correct, nonetheless, but the problem is not the level of expenditure as the article suggests.)

Moreover, state and local government spending isn't much less than federal spending, so total government expenditures are in the 35%-40% of GDP range, which is not abnormal.

The White House website has the following table of federal receipts and spending which I presume to be accurate;




The reporter graduated from college in 2001 and has been an economics reporter for three years, first for the Economist and then for the WSJ, so he should be a bit more aware of basic facts. Even more, his editor should.