Sunday, April 17, 2011

"Excess spending"

You hear a lot of, "we need to cut all the excess spending before we raise taxes!" from the right-wing. But what are they REALLY saying?

As I pointed out earlier, we are currently taxing America at the same rate as in 1950, though more of that is being paid by individuals and less of that is being paid by corporations than in 1950. But clearly we're spending more today than we were spending in 1950. So: What's the "excess spending" over 1950?

So I head to the figures. U.S. GDP in 1950 was $297.3B, while government spending was $70.3B, or 23.6% of GDP. For 2008 (last year for which I have actual figures), U.S. GDP was $14T while government spending was $5.3T, or 38% of GDP. So where are the big differences?

The first one is, of course, HEALTH CARE. Government spending on health care was 906/14T in 2008, or 6.5% of GDP, while government spending on health care was $2.7B/297B in 1950, or 0.9% of GDP. The vast majority of that difference is Medicare and Medicaid. So eliminate Medicare and Medicaid, and you get U.S. government spending down to 32.4% of GDP.

Next, SOCIAL SECURITY. In 1950, the vast majority of America's elderly did not qualify for Social Security because they had retired without sufficient years in the system. In 1950, Social Security and other government pension programs for the elderly were $1.4B/297B, or 0.47% of GDP. Today, that's 839B/14T, or 6.37% of GDP. Eliminate Social Security and cut all other pensions back to 1950 levels, and you get U.S. government spending down to 26.5% of GDP.

In short, SOCIAL SECURITY AND MEDICARE ARE THE VAST MAJORITY OF THE INCREASE IN U.S. GOVERNMENT SPENDING SINCE 1950. When consevatives talk about "excess spending", what they're *really* saying is "eliminate Social Security and Medicare". Conservatives are proposing the Soylent Green solution to the problem of the elderly consuming 9% of our national GDP for their healthcare and 6.37% of GDP for Social Security. Just turned 65? Report to a pet food factory for processing, citizen! That’s the conservative solution — they believe that if you’re no longer employed/employable in the private sector, you’re now a “surplus asset” to be disposed of. They have no empathy, no compassion, no conscience, and become very upset typically when you even mention those words in their presence, claiming that they do possess those qualities. Well, I suppose they do… for some definition of the words “empathy”, “compassion”, and “conscience” in some alternate universe, where undoubtedly the unicorns are pink and cotton candy grows on trees… but not in this universe, of course, where they blithely propose the premature death of millions of elders by condemning spending on elders’ healthcare and Social Security pensions as “excess spending”. So it goes.

-- Badtux the Numbers Penguin

Note: The expenditure numbers above cannot be directly compared to the tax numbers of the previous article due to the prior article omitting Social Security payroll taxes as taxes. In a further issue I'll try to add all those numbers up and show you where we are and what has to be done to match income to expenditures...


  1. I caught some guilt on a Righty blog about Righties being donators, and how Lefties don't donate in general. It rankles because there's a grain of truth there. I've been on the financial ropes for a decade now, and only help out in tiny ways.

    I'm also of the mind that instead of helping out a family here and a family there, (while making millions off thousands of other families) that it should be society helping out ALL the families. But apparently that's the same thing as oppression.

    Of course, I kinda read into their examples that they choose the "right" kind of people to donate to. I imagine, but I don't know, that that largess comes with an unstated debt of eternal reverence.

  2. Bill Maher makes this point all the time. He has a plate with a big hunk of fried chicken, a pile of mashed potatoes and another pile of mac 'n' cheese representing SS, Medicare and Defense. The rest of the budget is a sprig of parsley.

    The thing about SS, as opposed to the other programs, is that it's self funded. That's why there is a current surplus in the SS fund.

    Somehow, though, there's always money to invade a country with oil wells and dark-skinned natives.



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