A version of this column appeared in  The Augusta Chronicle (December 11, 2001, p. 7D) Numbers To humor my students, I recently assembled a data set that covers the past forty years of US macroeconomic history (1960 to 1999). Golly, that's going back to the days of President Eisenhower. Some observations: Since 1960, we have seen only five years of negative growth of the economy, namely in 1974, 1975, 1980, 1982, and 1991. Add in the current recession of 2001 and note that as good or bad luck would have it (depending on your favored political affiliation), five of the six recession years occurred during Republican presidential administrations. Even though presidents rarely are directly responsible for the state of the economy, they get blamed or take the credit anyway. (And I already know why Florida governor Jeb Bush will never become president. Two Bushes, two wars, two recessions – that's too good a sound bite.) Between 1960 and 1999, personal consumption spending ranged between 63 and 67 percent of total spending in the economy. It is not only the largest but also the least volatile component of the economy. We don't all need to vacation in the Caribbean, but we do need to eat, dress, pay the mortgage, and put gas in the tank. In other words, while discretionary spending has been rising, most of our expenses are non-discretionary and therefore put a limit on just how wobbly the rest of the economy can be. That's reassuring. In contrast, business' physical investment in their own companies (structures, inventory, machines and equipment) is very volatile and is single-handedly responsible both for economic booms and economic recessions. The spending share of physical investment in the overall economy has grown from 11.8 percent in 1960 to 18.8 percent in 1999. While more investment spending is an unqualified good – because it makes us more productive and allows higher living standards – its inherent volatility makes the astute management of investment spending swings ever more important. Here's a big surprise. Federal, state, and local spending dropped from 27.8 percent of the economy in 1960 to 17.3 percent in 1999! Sure, at $1.5 trillion dollar, government spending still is a big slice of the economy's pie, but the pie has been growing much faster than government's appetite. Don't confuse, incidentally, government spending with the government budget. For example, by far the biggest part of the federal government's budget is taxing working Americans to pay retirement and medical benefits to retirees. But this is merely a transfer from Peter to Paul that happens to be handled via government accounts. It is not government spending proper on items such as bullets for Osama, color chalk for Dr. Brauer's lectures, and dogwood trees for city beautification. Government spending proper has declined drastically as a share of the economy. Imports and exports have grown and grown and grown. In 1960, exports accounted for 3.1 percent, and imports for 4.6 percent, of the economy, for a net impact of 1.5 percent. By 1999, exports ran at 11.6 and imports at 15.3 percent of GDP, for a net impact of 3.7 percent. Remember that for every dollar leaving the country to pay for fancy wine and cheese imported from France, American flags and Christmas toys from China, digital cameras from Japan, and oil from Venezuela, there is a dollar coming back into the country as foreigners pay for Boeing aircraft, Microsoft software, Coca-Cola soft drinks, and (awful) Hollywood movies. Thus, while imports and exports each have grown by a factor of about 3.5, on balance the impact of the foreign-trade sector on the US economy amounts, in most years, only to a measly two to three percentage points. Income per person was $12,835 in 1960. Measured in inflation-adjusted dollars this had grown, by 1999, to $32,232, an increase of 250 percent. At least in material terms, the average person was 2.5 times better off in 1999 than in 1960. Of course, averages can be misleading. For example, if Bill Gates makes $10 trillion a year, and you and I make nothing, then on average we are well off. The slow pace of improvement in income-distribution notwithstanding, the current generation of Americans is substantially better off than the parent-generation was. Why are we so rich? Because productivity increased. While hours worked nearly doubled between 1960 and 1999, output more than quadrupled (a 428 percent increase). Productivity – output over hours worked – thus increased more than two-fold (by 221 percent) and translated into higher average incomes. Wait a minute! How can hours worked have doubled? We aren't a nation of 80-hours/week lawyers yet, now are we? Here's what's happened. Whereas the US population grew between 1960 and 1999 by about 50 percent (from, roughly, 180 million to 270 million), the number of people engaged in the labor market doubled from 70 to 140 million! This is attributable not only to population growth but to the increased participation of women in the work force, to bored (or vivacious?) retirees returning to the labor force, and to teenagers who now seem to run every restaurant and retail store in America (and who, if I had my druthers, should be in school or doing homework). A curious result of these trends is that whereas in 1960 only about 1 in 3 people in the US worked for remuneration, by 1999 this changed to about 1 in every 2 people. No wonder we are better off. And so the numbers go. All-in-all, give your parents and yourself (and your kids) a belated Thanksgiving pat on the back and do celebrate our good fortune this year-end season. We have all done very well. Dr. J. Brauer is Professor of Economics at Augusta State University's College of Business Administration. He can best be reached via his web site (http://www.aug.edu/~sbajmb).