Where are tax revenues going?
I spent a few minutes looking over past Federal spending—and the results illustrate pretty clearly how “cutting the pork” isn’t going to meaningfully reduce the deficit. Here’s where some of the federal spending:
- 24.8% - Defense, mostly for the Department of Defense.
- 22.5% - Healthcare, mostly in medicare and medicaid
- 22.3% - Social Security and pensions
- 8.2% - Interest
All of these are going to be very difficult to touch, politically. You may notice that they also consume 77.8% of the budget. With a 15.4% deficit, these programs come out to about 92% of our tax revenue. And they don’t include education, transportation, courts, national parks, any regulatory bodies, any other critical programs.
The amount spent on interest isn’t particularly negotiable—but we’ll need to make some serious reforms in the other three areas if we’re going to have anything that resembles fiscal responsibility. This may mean angering some powerful interests.
