Federal Budget and the Deficit

The United States is a debtor nation. We owe lots of money to other countries, especially China. In 2010 we will spend $176 billion in interest on that debt alone. Where does that money come from? Taxes, for the most part. The rest we borrow from other countries. Consider it like paying off one credit card with another credit card, this game can only go on for so long.

How long has this been going on? Longer than I have been alive, and probably you too. According to the Congressional Budget Office, the USA had $289.5 billion worth of debt held by the public back in 1968. Since then nearly every year we have been over budget, thus causing the debt to climb to a staggering $5 trillion in 2007.

The only time this trend has waivered was during Bill Clinton's presidency in the late 1990s. During his time in office the budget went from being over cost by $340.4 billion in 1992 to under cost by $86.4 billion. This means the federal government had a surplus, we actually made money and the deficit went slightly down. Unfortunatly when George W. Bush entered the Oval Office, the government swiftly went back to spending more than it made in taxes, overspending by $568 billion in 2004 and $342.2 billion in 2007. Sadly this trend will continue as Obama's 2010 budget is proposing overspending by an astounding $1.4 trillion dollars in a "spend money to make money" kind of plan. Will it work? I don't know and you probably don't either. Odds are good that neither of us is an economic analyst.

So what does this mean to you, the citizen? It means you should get interested in the federal budget, and soon. If you think the government is being wasteful and careless with your tax dollars, you can contact your representatives in the government, they would love to hear from you. Most importantly you need to educate yourself. Loud, irrational yelling about taxes that are too high or that the government should spend more or less on federal programs does nothing to help your or this country. Educate yourself and others so that you won't have to take the information you get from the networks' political pundits at face value. Form your own, intelligent, rational opinions on how the federal government should spend your money.

Sources:

Death & Taxes 2010

Revenues, Outlays, Deficits, Surpluses, and Debt Held by the Public, 1968 to 2007, in Billions of Dollars (PDF)

Death & Taxes 2010: The Rundown

I hope you have taken a good look at the 2010 Death and Taxes chart. After going over the chart myself, I came up with a crash course on the proposed 2010 Federal Budget:

Taxes to be collected (Reciepts): $2,333 Billion

Ammount to be spent (Outlays): $3,591 Billion

The government will spend $1,405 Billion more than it recieves in taxes, this is deficit (more on this later).

Where your tax dollars go:

• Military / National Security Discretionary: $901 Billion (25.1% of total budget)
• Social Security: $696 Billion (19.4% of total budget)
• Non-Military / National Security Discretionary: $520 Billion (14.5% of total budget)
• Income Security: $477 Billion (13.3% of total budget)
• Medicare: $452 Billion (12.6% of total budget)
• Medicaid: $ 290 Billion (8.1% of total budget)
• National Debt Interest: $176 Billion (4.9% of total budget)
• Veterans Benefits: $57 Billion (1.9% of total budget)
• Other: $24 Billion (.7% of total budget)

Play around with the numbers a bit, try and picture how your life would change if you re-adjusted the budget the way you think it should be.

For more a more detailed break-down on each of these main spending categories, check out the 2010 Death and Taxes chart. You can even use the chart it to calculate how much you personally pay for each part of the budget. For example, based on my yearly salary, I spend $4,500 a year on Military / National Security Discretionary.

So do yourself a favor and take a good look at this chart. It will put into perspective the federal taxes that you see taken out of every paycheck you get.