Sunday, February 16, 2014

Federal Government Spending in two must see charts/graphs. It has increased BUT it depends on what the definition of "spending" is. It ain't as easy as it sounds...

Nice, concise visuals of the metamorphisis that the Federal government has undergone in the past 40 years (from a report from the Cato Institute)

This first graph shows, in trillions of dollars, federal spending from 2000 to 2013 in the 5 categories spending can be categorized (see the box for descriptions).

Transfer payments are simply moving money from one entity (taxpayers) to a second entity (government) to a third entity (recipients of entitlements).  The major entitlement programs are Social Security, Medicare, Medicaid.  Interest on the national debt is another big transfer payment (about $290 billion last year).

You can see that at about $2 Trillion transfer payments are the majority of the Federal Budget and subject to the most growth since 2000.



The data below puts the growth of Federal government spending since 1970 in the context of national in come, or GDP.  Notice that transfer payments have almost doubled!  The other categories are relatively stagnant.

Conclusion:  The Federal Government has become a check writer---moving money from one place to another.  "Doing things" has moved down the list of things the Federal government might accomplish.

Some say that is a good thing. Some say it is a bad thing.  Either way, it is a thing.  I report, you decide.
Source: Cato Institute

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