The Budget

“Don’t tell me what you value, show me your budget, and I’ll tell you what you value.” – Joe Biden

Across the political spectrum, Americans have thoughts on how the government should spend the money we send its way. That’s great (and it’d be better if more of us voted), but many arguments about spending are based on very misguided notions of how we’re currently spending our money. So, today, some charts.

Source: OMB.

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See that blue piece? That’s what has a lot of folks worried. That’s the interest on the $18.4T national debt, which grew by another $426 billion dollars this year. So how much is $426 billion? Just over a third of what the US government got to spend on discretionary spending this year:

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That military chunk is huge (54%), but it’s worth keeping in mind that this money isn’t just disappearing; we’re spending it on American-built weapons, salaries for Americans, etc. It’s fair to question whether we should be bringing those resources to bear on other challenges.

So, where does the money go when you include everything?

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Social Security and Medicare are a huge chunk of where our money goes, but a large percentage of Americans seem very confused about how these programs work; politicians on both sides of the aisle are guilty of deliberately confusing the public about them.

If you ask Americans how much we spend on Foreign Aid, the average guess is 28%; in actuality, it’s about 1%.

Interestingly the government also publishes how much money it forgoes in the form of explicit tax breaks:

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To whom do we owe that money?

Today, we owe most of the money to ourselves.

 

Other Stuff

  • Not all debt is bad—if you’re investing what you’re borrowing and getting a greater return on that investment, you’re doing it right.
  • Comparisons of national income and spending to household income and spending are often trite and very misleading. But the counterarguments against such comparisons tend to obscure their own weaknesses too.
  • XKCD did a comic on money.
  • The White House Calligrapher’s Office spends $277k per year on salaries for its three employees.
The Budget

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