We tend to think of the role of government as furthering the public and common good. Providing for the national defense, building and maintaining roads and bridges, public safety, public transportation public schools, public libraries and public parks. Expenditures that all of us can benefit from in some form or fashion.
For the vast majority of our 200+ years of existence the federal government was focused on these issues. In 1953, only 14% of the federal budget was comprised of "payments for individuals". The rest went for defense, roads, prisons, parks and the like. In 2013, by contrast, these payments are estimated to account for 65.4% of all federal outlays. All of the data in this post is from The Budget of the Federal Government, Fiscal Year 2103 prepared by the Office of Management and Budget.
What are "payments for individuals"? These are federal government spending programs designed to transfer income (in cash or in kind) to individuals or families. This includes Social Security, Medicare, Medicaid, Veteran's Benefits, Welfare, Food Stamps and Student Loans. It does not include salaries to government workers or the military as these are considered to be payments in return for services provided. Therefore, "payments for individuals" effectively represent what amounts to the redistribution of income from one person to another with the federal government serving as the middle man.
These are not outlays for the common defense, common good, public works or public safety. These are government payments that are intended to benefit select individuals based on their age, their income, their health or any one of a number of other distinctions.
In total, "payments for individuals" in the 2013 federal budget are estimated at $2.5 trillion out of total projected outlays of $3.8 trillion. In other words, we are spending twice as much on these "special interest" payments as we do on defense, justice, roads, research, national parks and everything else Washington spends money on-combined!
Where is this money being spent? Here are some of the major categories of outlays.
Social Security $827 billion
Medicare $621 billion
Medicaid $283 billion
Public Assistance $170 billion
Food Assistance $112 billion
Civil Service Retirement $ 83 billion
Unemployment $ 75 billion
Student Assistance $ 60 billion
Military Retirement $ 55 billion
Housing Assistance $ 49 billion
I am not suggesting that all of these programs are ill-considered or bad. After all, Social Security and Medicare are there for everyone. Workers pay into these programs and deserve a return of their investment without someone drastically changing the rules on them just as they near retirement.
However, we all need to look in the mirror and ask ourselves how we have allowed what began as well-meaning social safety net programs to reach the point that they now account for 2/3 of federal spending?
Even worse, the Obama administration in its budget proposal for 2013 estimated that individual income taxes and payroll taxes would only amount to $2.3 trillion in the current year. This means that the $2.5 trillion in "payments for individuals" in the federal budget are not even being covered by the $2.3 trillion in "payments from individuals" in taxes. In effect, we are really borrowing every dime we need to fund what our Founders would have considered the basic fundamental functions of government. It is really hard to fathom.
I have said it before and I will keep saying it again and again...we are on a road to disaster that we are paving with trillions of dollars in debt. At some point the pavement is going to be gone and the road is going to get rocky and rough. We need to change our course before it is too late.
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| Credit: Jahn Henne |
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