50 Years of Government Spending, In 1 Graph

[mickeyd]

You may have to study this for a bit to get the idea that defense spending is way down and medicare is way, way up. Pretty interesting look at how we spent and spend our government cash over the last 50 years.

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Of each dollar the federal government spends, how much goes to defense? How much goes to Social Security? How much goes to interest on the debt? And how has this sort of thing changed over time? The graphic below answers these questions. It shows the major components of federal spending 50 years ago, 25 years ago, and last year.

50 Years of Government Spending, In 1 Graph : Planet Money : NPR

[pb4uski]

The growth in social programs (medicaid, safety net) is very noticeable.

6.8%>11.0%>24.3% Makes one wonder where it will all end.

[MasterBlaster]

The should include a projected budget, at say 2030 to show the effects of SS and medicare and how they will overwhelm everything.

[flyfishnevada]

Based on the budget deficits, I'm not sure any spending is "down". It may be down percentage-wise, but I'm pretty sure actual dollars, even inflation adjusted dollars, are up.

[Katsmeow]

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Originally Posted by MasterBlaster The should include a projected budget, at say 2030 to show the effects of SS and medicare and how they will overwhelm everything.

Well this graph doesn't show that SS will overwhelm anything. It's percentage is virtually unchanged in the last 25 years. Yes, medicare is a higher percentage than 25 years. It is unsurprising that it is high than in 1962 since it didn't exist in 1962....

Defense spending as a percentage is way down, but given the demise of the Cold War that is hardly surprising. Note the great reduction in defense percentage was between 1962 and 1987, not so much the in the last 25 years. And, of course, if something that was one more than 50% of spending becomes less than 25% of spending then obviously something else has to have a higher percentage regardless of whether the actual spending goes up or not.

[JOHNNIE36]

I think I understand graphs pretty but don't understand how interest on the debt could go from 13.3% in 1987 DOWN to 6.23% in 2011. I would think this figure would be much higher. We know the debt is much larger than 10 or 20 years ago and that this is an anchor around our necks. How could the interest on the debt be lower today (as a %) than 25 years ago. Weigh in all you financial experts.

[Mulligan]

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Originally Posted by JOHNNIE36 I think I understand graphs pretty but don't understand how interest on the debt could go from 13.3% in 1987 DOWN to 6.23% in 2011. I would think this figure would be much higher. We know the debt is much larger than 10 or 20 years ago and that this is an anchor around our necks. How could the interest on the debt be lower today (as a %) than 25 years ago. Weigh in all you financial experts.

Interest rates on the 30 yr in 1987 peaked in Oct at over 10% and now its what a little over 3%. That is the main reason I assume. I have read recently that even though our debt level is climbing quickly, interest payments haven't moved nearly as much because of the collapse in yields the past few years. Now if rates ever went up to that level again, the chart would definitely change wouldn't it!

[JOHNNIE36]

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Originally Posted by Mulligan Interest rates on the 30 yr in 1987 peaked in Oct at over 10% and now its what a little over 3%. That is the main reason I assume. I have read recently that even though our debt level is climbing quickly, interest payments haven't moved nearly as much because of the collapse in yields the past few years. Now if rates ever went up to that level again, the chart would definitely change wouldn't it!

Thanks Mulligan. The interest paid on Treasuries and the collapse in yields was not something I considered as heavily as interest on the debt. I wonder how the two compare?

[donheff]

These graphs are like a Rorschach test - we all see what we are predisposed to see. Many will see expanding Medicare/Medicaid and social safety net expenditures and conclude we have to cut them to the bone. I see them and conclude that we have to do our best to manage them but most important is to get our revenues in line to close the widening gap. It should be obvious to all that we can't get anywhere by focusing on cuts in the "everything else" category.

[packrat44]

I would like to see a graph comparing the relation of these spending areas given in inflation adjusted $.

[Midpack]

Quote:

Originally Posted by mickeyd You may have to study this for a bit to get the idea that defense spending is way down and medicare is way, way up. Pretty interesting look at how we spent and spend our government cash over the last 50 years.

Of course the OP graph doesn't show "that defense spending is way down" at all, though I don't doubt defense hawks might use it to claim same. All you can conclude is that defense spending isn't up as much as Soc Sec, Medicare, Medicaid - we all know they've grown faster than most if not all other spending categories. Defense spending is decidedly up, this (top) graph below shows dollars and % GDP. I take no position here, I just hope we'll ultimately deal with what is, not appearances...

[ziggy29]

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Originally Posted by Midpack Of course the OP graph doesn't show "that defense spending is way down" at all, though I don't doubt defense hawks might use it to claim same. All you can conclude is that defense spending isn't up as much as Soc Sec, Medicare, Medicaid - we all know they've grown faster than most if not all categories. Defense spending is decided up, this graph shows dollar and % GDP. I hope we'll ultimately deal with what is, not appearances...

That's probably a fair point. If something merely rises in line with inflation and GDP growth, it will look like it shrunk compared with things whose spending growth exceeded it.

In a nutshell, this can probably be spun in a lot of different ways depending on whatever point one is trying to make.

[arky]

Arguments about what pieces make up the budget can be distracting when the real problem is how much we spend above what we take in !

[ziggy29]

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Originally Posted by arky Arguments about what pieces make up the budget can be distracting when the real problem is how much we spend above what we take in !

True, but the details are a political football I'm not going to touch here. Suffice it to say that we all want to reduce (or eliminate) the deficit in general principle, but we're miles apart about how to do it.

[Mulligan]

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Originally Posted by JOHNNIE36 Thanks Mulligan. The interest paid on Treasuries and the collapse in yields was not something I considered as heavily as interest on the debt. I wonder how the two compare?

Interest rate certainly makes a difference. I did some quick research and assuming I am using correct numbers here is what I found.
1988 - we owed about 2.6 trillion in gross federal debt and paid 214 million in interest (I believe 30 yr. bond was in 8%-9% range)
2011- we owed about 14.7 trillion in gross federal debt and paid 454 million in interest
Lower rates certainly help reduce the burden of interest debt thats for sure. Another interesting graph I saw was the separation between gross federal debt and public debt. Meaning the gross debt is increasing faster than the public debt is, so the government owes itself a lot of money!

http://en.wikipedia.org/w/index.php?...ile:USDebt.png