In a previous post we discussed the nature of our monetary system that is debt based and some real changes that could be enacted to make this a debt free monetary system. Today we will look at spending that will also need major changes to curb deficits. Remember that the deficits are the amount annually or each year that is spent which is more than the total income. Debt is the accumulation of these deficits.
Even if the US started to print its own debt free money to replace the debt bound Federal Reserve notes, this would take some time to replace the trillions of actual currency in circulation along with the trillions in electronic money. It is still important to bring the federal government back to its intended purposes and thus shrink the spending. Revenue could also be increased by policies that encourage US manufacturing in the US and discourage outsourcing.
This will be a simple look at the outlays spreadsheet, using a pivot table it still included over 31,000 rows of data! This can be found at the GPO Website here.
The $3.834 trillion spent in FY2010 is broken down (in billions of dollars):
The interest according to this is less than our previous data shown. The data on this post comes from usgovernmentspending.com as well as the GPO website (linked above) which is a net interest versus the gross interest shown on the previous post.
As shown in the image below, 2/3 of the spending goes to Pensions, Healthcare and Defense.
The Pensions include Social Security which is 85% of the pensions cost, and federal employees retirement and disability which is the remaining 15%, which includes our elected officials. Keep in mind that Social Security is paid (in theory) by us to this fund for use.
Health Care includes $357.7 billion to Vendor Payments for Medicaid and Medicare and 497.3 billion to actual Medicare dollars for seniors.
Defense is of course the military (both foreign and domestic) and related entities. Not counting Iraq and Afghanistan, the United States spends approximately $250 billion annually to maintain troops, equipment, fleets, and bases overseas. There are approximately 850 bases around the world. According to Defense Department figures, by the end of April the wars in Iraq and Afghanistan - including everything from personnel and equipment to training Iraqi and Afghan security forces and deploying intelligence-gathering drones - had cost an average of $9.7 billion a month, with roughly two-thirds going to Afghanistan.
Looking at Welfare, $190.3 billion (40%) goes to vendors. This is defined as payments under public welfare programs made directly to private vendors (i.e., individuals or nongovernmental organizations furnishing goods and services) for services and commodities, other than medical, hospital, and health care, on behalf of low-income or other needy persons unable to purchase such goods and services. This is in contrast to the $103 billion that go to needy families for food and nutrition assistance. These are direct cash payments through programs such as TANF, SSI and Medicaid. Unemployment makes up $106.6 billion of the Welfare payments and $6.9 billion is Workman’s Comp. Housing Assistance is $64.1 billion of which $10.3 is spent on HAMP. The remainder of the Housing Assistance is to low income folks and special programs such as Housing for Persons with AIDS among others.
The blanket Other includes forestry, agriculture, mining, energy and the like. All of the details can be found in the data linked above.
Total receipts (or income) are only $2.57 trillion which gives us a deficit of $1.27 trillion. It follows that 33% of the spending is beyond our means. The recent so-called debt reduction is actually just cutting the amount of increases in projected deficit spending, not actually reducing the debt as is evident in the fact that the debt ceiling, or maximum amount of debt allowed, was once again raised.
It is important to acknowledge that much of the actual spending is buried in these various areas and much in secret. We constantly see stories on government waste:
These make it even more difficult to find out where our money goes. There are myriad off-budget gimmicks, unrecorded liabilities, and financial management manipulations on a scale that would put many executives of publicly traded companies in prison for securities fraud. The bottom line is that our budget process has been broken for years, and the accounting system used by the federal government in the budget process is a fraud by Securities and Exchange Commission (SEC) standards.