The Magic of the Budget

Back in April, Dave Lindorff had a post up at Truthout concerning the portion of the federal budget that went to defense.  It turns out it is 53%.  For that 53% we get the largest military in the history of the world.  In 2009 US military spending accounted for 47 percent of all money spent globally on war, weapons and military preparedness.

Today, on NPR’s Talk of the Nation, (I think at about the fourteen minute mark) Robert Samuelson explained that half of the federal budget consisted of taking money from the workers and paying it to the retirees.  He was on NPR because he had just written a column on the subject.  From his column:

Social Security, Medicare, Medicaid and other retiree programs constitute roughly half of non-interest federal spending.

So it would seem that the entire budget is nothing more than defense and moving money from workers to retirees.

But wait.  Samuelson also says:

In 1960, national defense was the government’s main job; it constituted 52 percent of federal outlays. In 2011 — even with two wars — it is 20 percent and falling.

So is Defense half the budget or twenty percent of the budget?

Well, the budget Lindorff considers does

not count… funds collected for Social Security

but does include

$94 billion in non-DoD military spending, $100 billion in veterans benefits and health care spending, and $400 billion in interest on debt raised to pay for prior wars and the standing military.

These two factors would obviously increase the percentage, but from 20% to 50%?

Although he does not say so in his column, I believe Samuelson did mention on NPR that some veterans benefits are included in his “workers to retirees” column and so, presumably, not in his defense numbers.

If you wondered why the budget is not well understood by the electorate, the above numbers explain some of that.

Also, note that Samuelson says Defense is 20% of the budget and falling.  Lindorff says that defense is increasing at 9% which would require the overall budget to increase at a greater than 9% pace for its share to be falling.

I have no idea who is right here.  But I would point out that the Social Security Trust Fund is not in any real trouble, a little tweaking and it is fine.  Medicare is a serious long term budget issue.  If defense inflation is 9%, then it is also a serious long term budget issue (especially if it is 53% of the budget!) .

Finally, Samuelson makes the point that

In 2011 — even with two wars — it [defense] is 20 percent and falling.

I would argue that if we have managed over fifty years to take defense from 50% of the budget to 20% of the budget (with the budget increasing from about 30% to 40% of GDP over that span), that that is something to be very proud of!

With so many ways of making the budget appear the way one wants it to, you would think we could use that magic to solve our budget problems!