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!

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