Where do my federal tax dollars go?
Posted by sanityinjection on June 22, 2009
Probably to your elderly neighbors:
” [In 1960] 52 percent of federal spending went for defense, 26 percent for “payments for individuals” — the welfare state. By 2008, 61 percent consisted of “payments for individuals,” 21 percent for defense. Social Security and Medicare — programs for the elderly — represented the lion’s share: $1 trillion in 2008. Most Americans don’t consider these programs “welfare,” but they are. Benefits are paid mainly by present taxes; there’s little “saving” for future benefits; Congress can alter benefits whenever it wants. If that’s not welfare, what would be?” – Robert Samuelson, Newsweek
Look at those numbers again. That is a stunning change in revenue allocation. Personally, I think 21 percent is about right for defense spending given that we are still fighting 1 1/2 major military actions. But for 61 cents of every dollar paid in federal taxes to go to welfare and entitlements – that seems insane to me. As Samuelson points out, these programs are nothing but wealth redistribution; there is no investment. (You will often hear politicians refer to the “Social Security Trust Fund”; in fact, there is no such thing. Instead of investing the money paid in Social Security taxes and using the earnings to pay benefits, the government simply takes the money and hands it out again. If Social Security were a private operation, it would be an illegal pyramid scheme!)
I like elderly people and am not sorry to see them getting something back for all the contributions they have made to our country during their lives. But at the very least, there should be a means test for Social Security benefits. My parents receive Social Security benefits which they do not need at all, while other seniors who have no other money can barely get by on their Social Security check.
Clearly things have gone too far. Think of all the other things government could do with all that money – use it to protect the environment, fund education, or simply allow the people who earn it to keep it and use it to stimulate the economy, give to charity or whatever they choose. It is time for the United States to decide which national principle we want to move forward under: “From each according to ability, to each according to need” or “Liberty and justice for all.”
I know which way I’d vote. What about you?
sanityinjection said
Further clarification: Let’s say you paid $1000 in taxes to the federal government in 2008 (including taxes withheld from your paycheck). According to the Congressional Budget Office, here’s how that money was spent:
$210 went to military salaries, equipment, and research
$210 was paid out directly in Social Security benefits
$230 for Medicare payments and administration
$80 to pay interest on the federal debt
$100 on other “mandatory” spending including Congressional salaries
$170 spread among every other budget appropriation (“discretionary spending”)
What are your reactions to this?
Jess Chapman said
I’m fine with the first four amounts (although they could raise the debt interest payments a little), but discretionary spending and congressional salaries could use some major trimming.
sanityinjection said
If Social Security was invested like a trust fund and not like a Ponzi scheme we could be paying off more of our debt using the interest earned on Social Security contributions. I don’t even know how much could be saved if SS benefits were subject to means testing.