Raising the deficit is rearing its ugly head once again. Forget about the points made by either side on this, yours truly is trying to wrap his head around the whole mess without the theatrics. One side wants to open the spigot wider and the other says every man and women or whatever for themselves.
In my wanderings I found and interesting breakdown of what we spend as a country. It delineates those numbers in a per person presentation. Kind of cool.
The United States spent $6.48 trillion in 2022 which is down about $920 billon from the previous year. Not because we are getting thrifty. COVID et al weren’t quite so gluttonous at our national trough.
Here we go:
The country spent a total of $19,434 for every human being in the USA. Kids and all.
Social Security $3657
Interest on debt $1451
Grants to states $3707
Public Health $3400
We had a budget surplus from 1998 to 2001.Our National Debt which we all pay interest on is now $31.4 trillion. This is the tab we have run up over the last 20 years due to social spending and yes, tax cuts.
The proportion of federal spending per person has changed over the past 40 years away from national defense and toward social programs.
There is no doubt the seeds of these deficits were sown in the 60’s and 70’s with social programs enacted by Johnson and Nixon including Medicare and Medicaid. No one had a clue it would grow by these proportions. The Affordable Care Act, Medicaid, financial downturns in 2009 and 2020 and tax cuts have only exacerbated the problem.
It is important to note: Social Security, Medicare,Medicaid et al were originally enacted as a fail safe, lest underprivileged people fall through the cracks. A social safety net of sorts. These have all grown into “entitlements” where everyone wants their fair share whether they need it or not. I often question whether we old farts would opt for every procedure, replacement or diagnostic test if we had to pay for them?
The US government has a mandatory and discretionary budget. Mandatory is locked in by law or circumstance. These include Social Security, Medicare, Medicaid, and the debt. This accounts for 2/3 of our annual spending. It is the law. It would be political suicide to change any of this and most of it requires a 60% vote. Fugeddaboutit!
The discretionary budget is what is up for grabs. All of these require appropriations. These are defense, the FBI, education and whole slew of other social needs, research, and plain old pork barrel. This is where the negotiations take place.
These all require appropriation bills. This is the so-called sausage making in Congress. In the times of mere mortals each side would give a little and voila we moved forward. Not so today where each vote is a litmus test or an infantile challenge to your manhood or womanhood. This is the process we support through or voting on election day. If you think it is screwed up we only have ourselves to blame.
The biggest discretionary allocation is the the US military. This includes operation and maintenance, personnel, weapons development and testing and procurement. It is the likeliest place where people try to increase or decrease. Including veterans it is over half of discretionary spending. The other percentage is taken up by education, health, transpiration, housing and foreign aid.
Strangely enough the discretionary does not bother me as much as the mandatory. Spending on Medicare and Medicaid has not just ballooned (Ha Ha!) but is exploding. I am going to go into in greater detail in another missive but suffice to say we ain’t getting any younger and for sure we are not getting healthier. Here in Flalaland just look around you at your next doctor’s appointment. That is our future.
Trust me I am beyond torn by this whole mess. I hate debt and always have. We spend close to $500 billion on just interest alone and that is sickening. And we want to add to it by raising the debt ceiling.
I am all for social services but the waste and misallocation are gigantic.There are people on the dole that have no business being there. You and I see them every day. Fraud is rampant in the healthcare community. We have made healthcare and yes even hospice a money making venture for private equity. Details, details you say? These people aren’t altruistically giving money away. There is gold in them thar hills!
When you see the economy teetering on the brink come June over the debt crisis just remember these numbers. Know that the business decisions are being made not by clear thinking businessmen and women but by dudes and dudettes who rely not on rational thinking but whether or not this is going to sell back home. In the land of plenty we have very tough decisions to make.Either cut benefits or raise taxes or both. If you have a better idea please tell me. I am stumped, but we have to do something. Or shall we just sit there?
Ted The Great
I have given you too many already but I do have one. When I got into my schtick over coffee with a friend he asked me why I get so worked up? He said he just wanted to put his life on automatic. I just can’t do that. I wish I could.
A conundrum indeed
End times. Solution for a believing world. Toast for the camels.
The reality is that $31 trillion, and climbing, will never, ever be paid. Where would the money come from? And we aren’t going to inflate our way out of it. Somehow the world, with the help of economists, will figure out a way to live with it. How I don’t know, but again, it ain’t going to be paid off.
You mention waste, but who doesn’t? Waste is a very subjective word as applied to government spending. There is one area of waste that is actually significant, but it’s too radioactive for politicians to touch: closing a large number of military bases and eliminating weapons systems, both which the Pentagon has urged for decades as obsolete. But we both know that despite (in this instance) trash talk about jobs programs, that’s exactly what they are. Again, reality is real, i.e., a lot of communities depend on these bases and manufacturers for the bulk of their employment. One can only imagine the decimation to those communities if these items were eliminated from defense spending. But since our elected reps haven’t voted for a BRAC in decades, I wouldn’t expect a vote on it in our future.
Another point, and I’m quoting you, “Trust me I am beyond torn by this whole mess. I hate debt and always have. We spend close to $500 billion on just interest alone and that is sickening. And we want to add to it by raising the debt ceiling.” I’m sure you know that the debt ceiling is about paying off the debts that congress already voted for. It’s the credit card payment that has come due, which you agreed to pay when you signed up for the card. It has nothing to do with cutting expenses for the next cycle of payment that has yet to be incurred. I am mentioning this as a point of clarification, which again, I am confident you know but some of your readers might be confused.
Lastly, I was a vehement opponent of earmarks 20 years ago. I have flipped on this. Earmarks are the oil that gets legislation passed. They incentivize our reps to vote on important bills knowing that they can bring a little pork back home. The percentage of the budget for earmarks is a fraction of one percent. Democracy is messy as is sausage making, but if earmarks help us to the finish line at a small cost while actually delivering some worthwhile projects, my view is that it’s worth it.
Hope the New Year is off to a good start for you and your family. All the best,
Thank you my friend. I understand the principal of the debt ceiling but if we raise without any discussion there can be no fiscal sanity going forward. People call it blackmail and in the wonderful world of politics it is probably just showboating but we refuse to have a balanced budget.
The element of waste and fraud is pervasive. I had the occasion to be on a trip with the Inspector General for HEW. He validated that we are very aware of the fraud and waste but Congress would not let him hire investigators even though he could demonstrate an ROI of 10 to 1 on salaries expended.
Here in Fllaland we see a proliferation of tests, scans etc. Probably to avoid litigation but another factor is the doctor or hospital are part of the ownership of testing facilities. The fact that private equity is the largest owner fo hospices throughout the country bespeaks the profitability.of dying. I find that beyond incorrigible. Ditto doctors practices, and rehab facilities. Upon purchase claims skyrocket and care drops.
I guess I am a tilter at windmills but I don’t know how else to wake people to reality. We cannot in my mind to continue spend wildly with no accountability. We have to raise the retirement age and also the threshold of salary above the $120,000 or so. AARP refuses to even discuss the age and millionaires cry foul on the salary piece.
As I said in the last, I can’t let this go. You and I will be out the door but. I and all of us have kids and grandkids. We created this mess with our largesse and lack of consequences. There is a better way but we all and I mean all refuse to take it.
Thank you again for your thoughts and willingness to discuss
When I was running my business Ted, my primary focus was always twofold, push for new projects (increase revenue) and lower overhead without sacrificing the ability to generate revenues….salaries and benefits were always our major expense being in a services oriented business…we didn’t manufacture anything, just provided professional engineering services. My Dad always preached (although he was never in business ) “expense is the enemy of profit”…not bad for someone who spent his entire life selling stuff to folks (automobiles, appliances, insurance, etc)…and did not do a very good job of saving for a rainy day….
My answer to your question is that we have to do both: reduce spending and increase revenue primarily through taxes…which taxes and how high is the big question..as everyone knows “the devil is in the details”…..
Like you I have always despised debt and although it took my several years to accomplish, I have zero debt and have no plans to change…always live within your means…..I also preach to our kids, grandkids ….whatever you earn,(net)…save at least 10% and avoid buying stuff….you know, “do you want it or do you need it”….
My 2-cents…hope all is well on your end…I just turned 83 today and living day by day and week by week being positive and trying to have a lifestyle that minimizes risk to health and happiness…hit em’ straight…
Dick Dick Almes Cell: 724-396-0223