By Carl Zulauf and Henrique Monaco
“Trillionitus” is the difficulty in thinking in trillion dollars, a significant constraint when trying to understand the US economy and economic policy. No personal experience is remotely similar in magnitude, but one way to gain some perspective is to compare the US economy and Federal spending to a measure closer to personal experience. This article presents such a comparison using median US household income to provide perspectives on the US farm safety net. The comparison suggests to closely watch whether the writing of the 2025 farm safety net outside the farm bill signals a new pathway for writing the farm safety net.
Federal Spending vs. Median Household Income
US total Federal spending and median US household income had generally similar trends until the COVID 19 pandemic in 2020 (see Figure 1). At present, it is unclear if the trend in Federal spending has changed or is reverting to its pre-COVID-19 trend. Whatever happens to future trends, the magnitudes of these two variables differ. In 2024, total Federal spending was $7.1 trillion while US median household income was $83,730. Median household income is the income at which 50% of US households have higher income and 50% have lower income. The data used to create Figure 1 are from Federal Reserve Economic Data (FRED), Federal Reserve Bank of St. Louis.
US median household income grew 273% between 1984 and 2024, the first and last year it is available from FRED. This increase exceeded consumer price inflation, which totaled 210% during the same period. Thus, contrary to a common media storyline, inflation-adjusted (i.e. real) median US household income has increased over the last 40 years. Over the same 40 years, US Federal spending grew substantially more, totaling 677%.
Source : illinois.edu