Final answer:
Out-of-pocket spending is a smaller portion of total expenditures compared to 1970, but per capita out-of-pocket costs have increased. Changes in healthcare cost distribution and federal spending, as well as economic policies, have affected how individuals experience and perceive economic strain.
Step-by-step explanation:
Out-of-pocket spending represents a smaller portion of total expenditures than it did in 1970, but per capita out-of-pocket expenditures have increased since 1970. Over the past few decades, there has been a significant shift in the burden of healthcare costs. While overall healthcare spending has grown substantially, the introduction of Medicare and Medicaid and the expansion of private insurance have altered how these costs are distributed. Consequently, individuals are directly paying a smaller percentage of total healthcare costs themselves than they did in the past. Nevertheless, in sheer dollar terms, the amount that individuals pay out-of-pocket per capita has gone up, compounded by the increase in healthcare costs overall and the rise in average family expenses.
Furthermore, the distribution of federal spending has evolved, with a decreasing percentage being allocated to national defense and a growing share dedicated to Social Security and healthcare expenses. Economic restructuring since the 1980s, along with policies such as supply-side economics, have led to income growth that has not been evenly distributed among Americans. While the total economy has expanded, this growth has not translated into proportional increases in income for the average American household. Consequently, even as federal spending has fluctuated around 18-22% of GDP, the feeling of financial strain has intensified for many, underscoring the complex relationship between government fiscal policy, personal expenditures, and perceptions of economic well-being.