50 Years Of Government Spending, In 1 Graph
npr.org
npr.org
Here is one here:
http://www.usgovernmentspending.com/spending_chart_1903_2010...
It seems U.S. spending has gotten to similar levels without actually having any sort of solid planning, so taxpayers are left in the worst of both worlds: 40% of GDP spending, but somehow you still have to buy everything yourself (like health insurance or college), because the state hasn't figured out how to provide it for that price. There are some exceptions; e.g. healthcare for the elderly is covered, and the interstate highway system is good. But not as much as I would expect for that size budget.
In other words, the biggest problem with our social systems is theft. The money was used over two generations to buy votes.
edit: it's interesting to try to calculate it roughly, but, it seems fair to estimate that the politicians have spent an inflation adjusted $30+ trillion beyond their means over the last 70 years ($16 trillion public debt, plus the money that should have been put aside and earning interest from SS and Medicare etc).
Medicare on the other hand is a different story. Costs are growing too high to make it sustainable. But that doesn't have to do with the efficiency of the program itself vs. other insurance companies - it's actually quite a bit efficient than private insurers. The problem seems to be the broader U.S. system of health cost/benefits compared to other countries. We spend more and get less.
It's actually a drag now, as it has been paying more in benefits than it receives for the past few years.
Yes, I know about the bonds. Paying them back is a drag because they weren't used to create profitable assets.
I don't think it's an acceptable option to retroactively say that some of the Soc. Sec. taxes won't be paid back to Soc. Sec., and just kept for the general fund. If that happened, then it's basically been a regressive income tax all along, contrary to Reagan's assurances in 1983 that he wasn't making a regressive change to the tax code, because of the bonds. If that is likely to happen, then at least the regressiveness should be fixed ASAP by removing the $110k cap, because the only justification for the cap is that the money is earmarked for Social Security.
I didn't suggest that. I'm just pointing out that the "drag" has already started.
> and just kept for the general fund. If that happened, then it's basically been a regressive income tax all along
It's not a regressive tax because of the payout is capped too.
In fact, it's actually a progressive tax because of the way that payout works. The ROI for folks who pay the minimum is pretty good. The ROI for folks who hit the cap is horrible.
That said, some subgroups do worse/better than others. The worst is probably black men. They don't live long enough to get the payouts. I think that white women are the big winners.
> If that is likely to happen, then at least the regressiveness should be fixed ASAP by removing the $110k cap, because the only justification for the cap is that the money is earmarked for Social Security.
Actually, the designers of SS put in the cap because they thought that it was the best way to protect SS from political fights.
Are you planning to remove the benefits cap as well? If not, it's just another tax and rich people are going to care. SS's designers wanted rich people to ignore SS.
If you do remove the benefits cap, then you get to explain why Ross Perot gets $400k/year in benefits.
I think that SS's designers got that part correct. The payout formula needs some tweaking.
I agree. My point is that the problem exists now.
> I don't think it's an acceptable option to retroactively say that some of the Soc. Sec. taxes won't be paid back to Soc. Sec.,
I didn't suggest default. I'm just pointing out that the "drag" has already started.
> and just kept for the general fund. If that happened, then it's basically been a regressive income tax all along
It's not a regressive tax because of the payout is capped too.
In fact, it's actually a progressive tax because of the way that payout works. The ROI for folks who pay the minimum is pretty good. The ROI for folks who hit the cap is horrible.
That said, some subgroups do worse/better than others. The worst is probably black men. They don't live long enough to get the payouts. I think that white women are the big winners.
> If that is likely to happen, then at least the regressiveness should be fixed ASAP by removing the $110k cap, because the only justification for the cap is that the money is earmarked for Social Security.
Actually, the designers of SS put in the cap because they thought that it was the best way to protect SS from political fights.
Are you planning to remove the benefits cap as well? If not, it's just another tax and rich people are going to care. SS's designers wanted rich people to ignore SS.
If you do remove the benefits cap, then you get to explain why Ross Perot gets $400k/year in benefits.
I think that SS's designers got that part correct. The payout formula needs some tweaking.
If the money really is going to be repaid to the Social Security system and used exclusively for benefits, then I agree it's a different situation, more of a quasi-retirement-account.
SS is not a general revenue tax - taxes don't have contribution-based payouts.
If you're suggesting that SS payouts should be completely means tested, you're opening the biggest can of worms. The SS recipients that complete means testing would most affect are among the most politically active people in America.
When I was younger, I used to argue against SS and the like as old-people welfare. I didn't see why my money should go to to folks who were better off than me. My age-cohorts disagreed.
Soon the subsidies will start flowing my way....
Did you miss this part of my comment?
> in the case, which is vaguely proposed on and off, that Social Security will never get the money back from its mythical "lockbox", and instead the money will be retroactively turned into just general-treasury money
Especially in the last Social-Security-reform debate a few years ago, there were serious proposals that the Social Security tax surplus notionally held in bonds will never be repaid to Social Security, and therefore reform proposals should be made which allows SS to be solvent under the assumption that it will never get its bonds repaid.
If that happens, a significant part of the past 20 years' Social-Security tax money will not be used for SS payouts, but will be kept by the general treasury. In that case, SS will retroactively have been, in part, a regressive general-revenue tax.
If 100% of the Soc. Sec. money collected is eventually used to pay Soc. Sec. obligations (i.e. SS is able to call its bonds), then my argument doesn't apply. I'm not confident that will happen, though.
32.9 != over half. Including Medicaid gets 43, still not over half. Not likely to give much credence to rest of your claims.
http://www.nejm.org/doi/full/10.1056/NEJMsa022033
"The gap between U.S. and Canadian spending on health care administration has grown to $752 per capita. A large sum might be saved in the United States if administrative costs could be trimmed by implementing a Canadian-style health care system"
This probably doesn't even include the added cost to businesses of having to employee additional HR staff to coordinate the insurance and reimbursement accounts.
Every politician interested in job creation should be pro universal/single payer/socialised healthcare. The financial burden of administering and paying for private insurance has to be a significant burden for both small and large businesses.
Edit: Please do not down-vote just because you don't agree. The second Gulf War was explicitly called OIL (Operation Iraqi Liberation). See http://en.wikipedia.org/wiki/2003_invasion_of_Iraq#Military_... and http://www.youtube.com/watch?v=GoSBqs6y8uM
Gas in many countries is far cheaper than in the US, and the reason it is more expensive in others is heavy taxation and regulation, not lack of coercive negotiations.
The npr graph from the parent post is extremely misleading, and understates the US military budget by roughly a factor of 2. Huge portions of the "non-military" budget entries are covers for military spending.
For example, the npr graph counts $141 billion dollars in VA health care for soldiers, but this isn't listed as part of the military budget. The same games are played with weapons r&d (often budgeted to the Dept. of Energy). Our recent Dept. of Homeland Security contains a great deal of military spending as well.
When one separates the budget by spending intent rather than the politicized department budgets in the above graph it becomes quickly apparent why we don't have good social services -- we're spending it all on military.
Is all defense spending under defense? or is there a lot hidden under education and health?
I have played with too many budgets to accept things like this at face value.
Edit: never mind. I was referring to what they call the "unfunded" wars under GWB but the graph obviously doesn't include those years.
Military expenditures are much higher than 22%, even in 2011. These budget numbers hide much military spending in other budgetary components -- for example, veteran's benefits or military scholarships will fit into another category (Medicare, everything else, etc). Statistics that put military spending at a quarter of our budget never include these costs.
A big part of this "change" comes from a budgeting game which hides military costs in other budgets. Contrary to claims in the article, VA benefits and medical claims did exist as an expense 50 years ago -- but they were directly part of the Defense budget at that time.
Either way, the wars are very cheap these days.
$850x billion is spent on the military. That has doubled since the mid 1990s, and so has everything else roughly.
Now, if you want to consider whether the CIA is an arm of the military, that's a fair issue. If you want to look into the drug trade and how much money the US Government makes from that, that's another fair issue. Also, should the NSA be considered a military wing, because it has a $80 billion budget all by itself.... If you count those types of police state entities, then the military spending is another 5% of the budget.
"Federal spending has grown roughly as fast as the overall economy over the past 50 years."
And then immediately after that says spending climbed from 18% of GDP to 24% of GDP, which is a 33% increase.
This is only true because 50 years ago veteran's benefits and many other related military benefits were part of the defense budget. In 2011 this amounted to $141 billion dollars. Cite: http://en.wikipedia.org/wiki/United_States_federal_budget#Ot...
This alone represents a false 20% reduction to the "Defense" budget, at the expense of increasing the appearance of social services budgets. If one adds up all defense related spending not by Federally published categories but by actual expenditures then the picture changes radically -- and it looks a lot closer to the budgets of yesteryear.
[1] http://www.ukpublicspending.co.uk/uk_health_care_budget_2009...
Update: i'm an idiot and read the "Public net debt" row instead (just skimmed to the bottom row and presumed that'd be a sum). The actual percentage is 17.09% which is considerably higher than I originally had it, but still a great deal less than the US.
In fact, Social Security is a tractable spending commitment. It is only Medicare that is growing like a crazy metastatic cancer.
And Medicare is growing like that because health care spending is growing out of control in the private sector, in the VA, in Medicaid, and everywhere.
The main drivers of health care spending are mostly not addressed by the Romney-Obama health care reform ('Obamacare') passed in 2010. Only a few minor tools to slow growth will be in the hands of federal bureaucrats and only if they have the courage to sieze them. Nobody is even talking about educating, licensing, and allowing immigration of more doctors; the USA has a very low level of practicing physicians for a first world country. Licensing regulations also prevent pharmacists and nurses from taking responsibilities for direct patient care that other countries allow them, exacerbating the problem.
This graph with it's hand picked years and tweens between the dates seems to show a monotonically decreasing defense spending which is a very wrong way to think about it. We have had a lull in defense spending after the end of the Cold War, but the last 10 years have seen an increase of more than 50% in dollar values of the defense budget.
I don't want to attribute malice to the creator of the graph for their selection (and exclusion) of the data points, but I feel being manipulated.
cato.org/images/testimony/coulson-2-9-11-2.jpg
Imagine if that were
- Price vs. Hard Drive space, OR
- Price vs. Computer Chip
We would be paying more for slower computers!
Yet when the government spends, and produces outcomes like these, the cry is always for "more funding."
To make this concrete, many people on HN are involved in startups.
If you showed prospective investors numbers like the kind in that graph -- for something you produced -- you would be walking away without a check.
Honestly, if I were an investor and a startup tried to sell me that chart, I'd walk out of the room.
The broader point is valid, though. Education policy in the US sucks. But the details matter a whole lot -- we're spending on the wrong things (tests, security) and not on the things that are known to make a difference (e.g. teacher salary -- make it competetive with other professions and you'll get better teachers). It's far more complicated than the libertarian "Gov'mnt spending bad, hur, hur, hur." line.
EDIT: Hayek, Nobel Prize in Economy in 1974, is one of the most well-known libertarians out there: http://www.nobelprize.org/nobel_prizes/economics/laureates/1...
His advices on Economy were notoriously NOT followed.
Libertarianism isn't well-served by letting anarchists call themselves libertarian unchallenged. I would like to see more of what I see on HN out in public view.
Basically: Hayek being "right" about something doesn't make the Cato institute "not true libertarians".
I think the only generic you can say about libertarians is that : they care about freedom of property and consider government intervention in private affairs with criticism. Beyond this point, the commonalities disappear, and there is a wider range of opinions among libertarians than in any other political group out there. There is no real "dogma", while Von Mises and Hayek are more or less recognized as Thought leaders for some of them.
I did not claim, by the way, that Hayek was "right" about anything, I just wanted to show one of the figureheads of some parts of the movement. Getting a Nobel Prize does not mean anything to me, and I personally feel very strongly that the recent Economy Nobel Prize Jo Stiglitz does not know what he is talking about (he's just an old school Keynesian, and even Keynes himsel admitted in being wrong later in his life). Stiglitz has a clear political agenda that has nothing to do with actual economic sense.
Instead, look at the Peter G. Peterson Foundation's graphs, like this one of our debt and projected debt: http://www.pgpf.org/Chart-Archive/0024_federal-debt-full.asp...
The Peterson foundation used to be an NPR donor. I don't know whether they still are.
Even in France, the bullet trains lines cost way too much versus their planned profits. Some will not be profitable for another 20-30 years! And that's assuming that, by then, it's still the best way to get from A to B. It's all about getting votes in the end, it does not make economic sense at all.
The bulk of the US population live in areas that have population densities at or even sometimes (NYC) above European levels. The entire state of california (not exactly high density at all, given the bulk of the state is just open space) has an average population density slightly higher than Spain, a country that managed to build a national High speed rail network.
The entire eastern sea-board is at roughly european density levels as well. No one is suggesting we build a bullet train that goes to North Dakota.
As for "not being profitable for another 20-30 years", you are arguing from a very short-term mindset about national infrastructure, but also you are pre-assuming that infrastructure should be directly profitable. This is not a commonly agreed idea, rather there is fierce disagreement between fiscal conservatives who think the government shouldn't do ANYTHING, and those (like most of europe) who believe the government should undertake large "public-good" projects precisely because they are not directly profitable, but they are PUBLIC GOODS.
Universal health care is also "not profitable" directly, but the benefit to society of having everyone live decades longer is massive increased economic output, to say nothing of increased quality of life.
The network effect of having efficient rail transportation balloons the entire economy. This is why governments pay for big infrastructure: everyone benefits and the direct revenue and direct costs are high enough to be uninteresting for investors.
New York is by far the "shining" beacon of mass transit in the US, but even its infrastructure is deteriorating.
We don't build transit here not because it wouldn't work, but because of purely political factors. It's a punching bag for the anti-tax brigade and the NIMBYs (most also in the anti-tax brigade) go apeshit if they think public transit might bring a brown person to their neighborhood. The horror!
That doesn't mean it's a good thing, so this is a very poor argument.