US Budget: A little education and perspective

So thanksgiving is just a day away and this is one of the best holidays of the year in my opinion, too bad the only thing missing from this holiday is blowing something up(ie fire works).

The market keeps heading up, but I think everyone knows at this point that it is unsustainable, but refuse to admit it. Unemployment continues to rise, and real estate prices continue to fall (contrary to the media reports). Gold has gone whacko, much like oil did at $140/barrel. Inflation is near zero, and granted the Federal reserve is printing money, but believe it or not, not much of it has entered the playing field, and not to the tune of the rise in gold.

But, that is not what this post will cover. While digesting a wonderful meal filled with all sorts of dishes only served up once a year, or while fighting over the leg and dark meat, I am sure at most tables the economy will come up. Some in passing, some more serious than others, and some will be of out right concern, as many can give thanks, there are always those that need help.

So, a little educations and perspective for you this holiday season. As the government takes over all sorts of fields of industry, and some private questions between family over housing, jobs, and money take place in the living room, or in the back yard let me give you a little perspective to see what is coming.

The national budget. I spent some time gathering the data, and although not extensive, nor in depth, whether you are talking about health care, the war, or the economy, this may give you some guidance on your comments.

So below is the US national budget for the last 11 years plus estimates for 2009 and 2010. The 2009 stuff is in, but not from this website and so that is ok. You can retrieve the data from Table 5.2 from the White House website.

Now, a couple of notes. I grouped everything that was less than the NASA budget into one and called it Small Agencies Combined*** to make this more readable. Also, you will most likely look at the last column and ask, what is Undistributed offsetting receipts, unless you pass accounting or budget confusion 101. If you want the details, try here, but otherwise, it is simply money the government collects for specific agency fees (not taxes).

I will start with the small things, and move up, but look at the love for NASA. Nearly flat budgets... but surely we are doing more for education, as that is what every politician says. Well, except after 2005 outside of 2 blips. and on the blips, that is you stimulus, although estimates are that only 30% was spent, so the orange lines should all be smaller.

So there are 4 I would like to focus on (other than NASA is getting screwed). First up is Social Security (on and off budget, which I do not really care about). Note the smooth progression as it grows. But budgets are also shown in pie charts, as percentage of is telling along with the trend.

#1 and #2 is 13% for social security and 17% for Health and Human Services (HHS). Pretty high, but I suppose that is tolerable as an incentive for encouraging folks not to save for retirement. But wait, HHS is 95% Medicare and Medicaid, which simply put is health insurance for the same group, so caring for the aging folks is roughly 30% of your taxes. So, I count that is #1 & #2 on the tax list.

#3 is... hold on... the Treasury? Right, forgot, massive debt that just this week exceeded $12 Trillion dollars. Gotta pay the interest. Now, this is an inflated number, as all of the stimulus was not spent, so the percentage should be lower, but not lower than the military. So, for round numbers say 15% of your budget is to pay the interest on your credit cards (it is about 50% of the 2009 actual treasury budget). And lets be clear, that is the interest. Not the principle. Think about that for your household budget, of say $60,000 post tax take home pay, $9000 of that goes to paying the interest on your credit card. Are you in trouble in that case?

And to add perspective, receipts for the US in 2009 were about $2.1 trillion, while expenses were about $3.5 trillion. Looks like a winning formula to me, what could possibly go wrong?

And then there is defense. Probably the thing everyone believes is #1 in the budget, but in reality is no where close. Arguably, it is the only thing that the National government should be spending money on. I know some would even question that, but I will not go there.

So, in closing, there you have it. I will grind my axe one more time, NASA gets walked all over in every circle, but look at what they do with what they have. Where would we be if for one year we took the HHS money and gave it to NASA? I'd bet I'd be posting this blog from the moon or beyond. But instead it goes to universal health care for the aging population.

Some will view this as a harsh post, attacking the seniors of the country, and it is, but yet is not meant that way. Why I ask should the government provide you with a monthly stipend, and provide medical care? You reach a certain age, and after years of freedom, the government takes over. The post's real intention is to educate you as to where your money goes. I would not recommend engaging on the HHS/SSA debate, as that will not end well over the desert table.

So pass the gravy, and have a happy Thanksgiving!