Where is our money going when the federal government spends it?
Chart1 below, taken from OMB data, shows the all outlays, or spending buckets, as defined by the office of manpower and budget. Chart1 is organized from fiscal year 2000 out to fiscal year 2018. FY 2000 through 2012 data is actual budget data while FY13 through FY18 data is forecast. The important thing to note in this table is the red and green arrows. The red portion of the arrows shows the trend of upward spending and growth in spending where as the green portion of the arrows show a decline or leveling in spending.
Unfortunately our federal government’s spending is out of control, as clearly shown by the red arrows and the steepness of those arrows. There are very few green ones. Downward movement, with the exception of the Department of Defense, which took roughly an 18% decrease in two major cuts, is the exception to the high spending rule. The first cut happened under Sec. Gates when he reduced the Department of Defense budget buy $483 billion over 10 years. The second cut, a result of sequestration, equals nearly $500 billion over 10 years. The other buckets that you see with green arrows were also caused by sequestration.
Notice that the red arrows’ upward vectors are significantly greater than the leveling in the few buckets that the government reduced. It’s also important to notice the increasing vector in the far right bucket, which is interest on the federal debt.
The president of the United States and the Democrats in Congress continue to rack up nearly $1 trillion more in debt, in the names of our children every year, and they have no plan to ever balance our nation’s budget. The only slow down to the relentless spending spree was caused by the Republican Party attempting to arrest the disaster that reckless spending most certainly leads to.
Chart 2 is a blowup of the major outlay buckets shown in Chart 1. Chart 2 also adds fiscal year’s 19 and 20 to the total national defense in total net interest buckets. The increase in the total net interest is very likely optimistic, as it is based on a historically low 3% interest rate.
Fiscal Years 19 and 20, in the total national defense bucket, are likely excessive given that OMB calculated them before the impact of sequestration. What this chart shows is that soon after FY20, interest on the national debt will exceed the entire national defense budget. Interest on the debt is like interest being paid on a credit card. It comes back month after month eating up the family budget. There’s no option but to pay it or go bankrupt. Paying that much in interest every year in your personal budget means there is far less money left to pay for groceries, the mortgage, or save for the future.
The same is true for our nation as the magnitude of this interest bill will soon eat over $1 trillion a year!
Chart 3 adds two more columns to Chart 1.
- Total outlays, which is the sum of all of the other buckets
- Total receipts (taken from OMB table 1.1), which is essentially all the taxes collected by our government.
These two buckets look like massive skyscrapers, but the total outlays bucket is much taller. The difference between these two “skyscrapers” becomes debt piled upon the backs of the American people. The red arrow exceeds the green and the two never meet. This is an unsustainable, reckless, and eventually disastrous path created by both parties, but vastly accelerated by Nancy Pelosi, Harry Reid, Democrats in the House and Senate, and Pres. Obama.
The only responsible policy is to balance this budget, and it’s clear that the people who accelerated it are completely incapable of helping to fix the problem. They must be thrown out of office, marginalized if they can’t be replaced, and gone around to save our Nation’s future.