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Cost of Government Day (COGD)
[2005] [2004] [2003] [2002] [2001]

2004 COST OF GOVERNMENT DAY


Cost of Government Day for 2004 is July 7th. 2004 COGD is slightly lower than the revised 2003
Cost of Government Day of July 8th. As a result, working people must toil on average 189 days out of the year just to meet all the costs imposed by government. In other words, the cost of
government consumes 51.6 percent of national income.

Changes to the Cost of Government Day Report

In December 2003, the Bureau of Economic Analysis (BEA) released the results of a comprehensive benchmark revision to the national income statistics used to calculate the Cost of
Government Day report. Data was revised going back to 1929 and the most significant changes
occurred in the past few years. This revision significantly changed the composition of the historical COGD date.

Based on the revised data, government spending was undercounted by more than $2 trillion from 1977-2002, while national income was undercounted by $974 billion. Given that government
spending outweighed national income, the average American worked a total of 125 more days to
pay for government spending than was previously expected. At the same time, the revisions showed national income increased faster than government spending than was previously expected in the late 1990’s through 2002. This had the effect of reducing the number of days worked to pay for government spending over the past decade than was previously expected.


These changes also had a significant effect on the 2003 Cost of Government Day report issued last year and what is in the report this year. According to last year’s report, ATR estimated COGD to be July 11th. However, in light of the new data, coupled with stronger than expected economic growth following the Bush tax cut, the revised Cost of Government Day for 2003 was July 8th.

Cost of Government: Trends

Cost of Government Day falls one day less in 2004 than it did last year and is the first decline after three straight years of increases. Slower economic growth, a recession, the war, and corporate scandals were responsible for the substantial increases in previous years. However, it appears the index has turned the corner. The decline in 2004 wipes out the increase that took place in 2003 and COGD is now at the same level it was at in 2002. The acceleration of economic growth in the wake of the latest Bush tax cut has produced more income for Americans which has mitigated the large increases in spending and regulations in 2003 and 2004. Moreover, COGD is still 5 percent above 2000’s level and the average American is working more than nine days to pay for the cost of spending and regulations than they did just four years ago.