San Juan Mountains

San Juan Mountains
San Juan Mountains: Grenadier Range

Wednesday, May 27, 2015

How Government Spending Has Changed

The following pie graphs illustrate the nature of federal spending in the Socialist Democracy of Amerika in 1965 and 2014.  They present a stark comparison between government spending fifty years ago and government spending today. Take a look at these two graphs and see what you can find.  I will join you at the bottom for some commentary of my own.

* includes investment in infrastructure, community & regional development, science & technology, administration of justice, international affairs, etc.
Source: Office of Management and Budget

Although government spending has grown, in nominal terms, from 125 billion dollars to almost 3,600 billion dollars in just fifty years, when calculated as a percentage of Gross Domestic Product it has only increased by 19% over the period.  What is most startling about current government spending is not its enormity, which is enormous enough, but how allocations have changed over the years.  Consider these facts:
  • National Defense has dropped from 41% of the federal budget to 17% in 2015.  The Socialist Democracy of Amerika spends more on defense than any other nation in the world, despite the fact that current levels of defense spending are 60% lower than they were fifty years ago. Of course fifty years ago was right in the middle of the Cold War and nuclear bombs, as well as the research to make new and improved nuclear bombs, was expensive. 
  • As is to be expected, outlays for Social Security have risen from 14% to 24% of all federal spending.  This will only continue to grow as the SDA experiences the demographic reality of an aging population.  You pro-choicers who might be reading this post can thank yourselves for the practical outworking of your doctrine...fewer babies mean fewer workers which means your Social Security checks will likely end up being smaller than today's generation.
  • Interest on the national debt has remained essentially the same, at 6-7% of the total amount spent.  Of course the 1 Year Treasury Note was paying 4.0% in 1965 while today it is paying a whopping .1%.  What do you think will happen when interest rates finally rise?  That will be a fun thing to watch.
  • Payments for all of the various welfare programs have increased by 50% over the last fifty years, from 14% of total spending to 21%.  What have the taxpayers received in exchange for this "investment" in the nation's "poor?"  According to this website, "In 2012, 46.5 million people were living in poverty in the United States—the largest number in the 54 years the Census has measured poverty. The poverty rate (the percentage of all people in the United States who were poor) also remained at high levels: 15% for all Americans and 21.8% for children under age 18."  A rational person would stop investing into such a poor performing investment vehicle.  Do we need any further proof that the career politicians who rule over us are not rational?
  • By far the biggest change in spending over the past fifty years is the migration of spending from the "Other" category to the "Medicare and Other Health Programs" category.  Ladies and Gentlemen, I give you Obamacare!  Medicare and government provided (read "taxpayer provided") health care has grown from just 1% of the total government spending in 1965 to 26% of all federal spending today, with no end in sight to its rise.  What do you think will happen when government spending on health care has consumed all of the money available in the "Other" category?  That category is down to just 6% of spending, from its high of 23% in 1965.  Where is the money for Obamacare going to come from when Other is gone?  
I believe there is only one thing that can be derived from the above pie charts.  Either government is going to soon be forced to exercise fiscal discipline or government spending is soon going to spiral out of control as historical proportions are dramatically exceeded due to the demands of Obamacare.  Which do you think will happen?

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