Saturday, October 23, 2010

For My Republican/Conservative/Tea Party Friends: "Here is where all that Government Spending is Really Going"

While you're probably correct in thinking:


I've been cogitating about this chart since I first saw it a month ago.

From Clusterstock:
The Congressional Budget Office  is basically projecting $1-trillion dollar annual Federal budget deficits for as far as the eye can see.
This will require the country to pile another $1 trillion of debt on top of our existing $13.5 trillion debt load each year, which will quickly drive our national debt-to-GDP ratio over 100% (Greece-like).
So, naturally, people are concerned about all that government spending.
So where's it going, really?
Well, when you dig into the CBO's 10-year estimates for the growth in Federal spending over the period, you find that Federal government spending is expected to increase by about $2 Trillion a year over the next 10 years.
Where's that money going?
It's basically going to three things:
1. Entitlement programs (Social Security, Medicare, Medicaid) -- +~$1.2 Trillion, or 60% of the increase
2. Interest on our debt -- +~$750 billion, or 37.5% of the increase
3. Everything else -- $50 billion, or 2.5% of the increase
Here's a chart that shows this, from Paul Kasriel at Northern Trust:

What everyone's fighting about right now, by the way, is that little green bar--"everything else"--the 2.5%.
Maybe it's time we turned our attention to the other 97.5%?
Change In Federal Spending, 2011-2020