by Mark Harvey
Someone described the US Federal Government as a huge insurance company that has its own army. There’s real truth to that description. The vast majority of the federal budget goes to Social Security, Medicare, and Medicaid. Those entitlement programs take up about 65% of the federal budget, while the military takes up about 11% of the federal budget. The interest on the federal debt takes up another 8%, leaving only about 15% for “discretionary” spending. The money spent on the military is also considered discretionary but given our vast reach with hundreds of military bases in dozens of countries, voting to reduce the military budget much would be political suicide.
The word discretion implies both the freedom to choose and sound judgment. So discretionary spending on the federal level might lead one to infer that the spending is done with good judgment. Our government receives vast sums of money through taxes and like a good frugal household never spends more than its annual revenues, with some savings set aside for a rainy day. (Insert percussive sting made after a weak joke). Actually, the federal government spends money like your deadbeat uncle with intermittent employment, too much familiarity with how the lotto works, and numerous investments in machines that purport to have finally succeeded on the concept of perpetual motion. This is not your Shaker family living with simple furniture and within its means.
Last year the federal government took in $3.4 trillion of taxes and spent $6.6 trillion, nearly twice its revenues. A trillion dollars is a vast, almost inconceivable amount of money. And yet our government spends money in such cosmic sums that congresspeople and senators toss around the word trillion as if it’s the cost of a night’s stay in a Motel 8. Perhaps the two best quotes about casually spending and losing vast sums of money come from the late Texas oilman Nelson Bunker Hunt. When asked about his $1.7 billion losses after he tried to corner the silver market, he replied, “A billion dollars isn’t what it used to be.” Then at a congressional hearing when asked about his net worth, Hunt replied, “I don’t have the figures in my head. People who know how much they’re worth aren’t usually worth that much.” Read more »