Federal Spending (And Deficit)
FEDERAL SPENDING:
Federal spending is the amount of money the federal government spends every year. This money is usually collected through taxes or is added to the nation’s deficit. Federal spending is very complex but we will give you a brief understanding. The U.S. budget is developed by the president and then proposed to Congress. There are two basic types of spending, “Mandatory” and “Discretionary”. Essentially “Mandatory” means that about 60% of the money collected by the government must be spent on the people. Essentially 60% has to wind back up in the hands of the people in some way. “Discretional” means the government can use its own discretion on about 30% of the money collected. The bulk of “Discretionary” spending winds up going to the military but also into education and environmental protection and funding the executive branch (i.e. Their own salaries). Those last three areas are where Republicans and Democrats tend to differ in how they split that money. The final bit of money is spent on interest.
If the government spends more than it collects in taxes, this is a deficit and becomes debt. If the government spends less than it collects in taxes, this becomes a budget surplus and can be used to pay off old debt. “Interest” is the easiest area to lower costs and an example of why overspending is so bad. We will include a Wikipedia graph just as an example of how “interest” can end up wasting so much money. While many people like the idea of “tax cuts” and just adding “debt”, you can see how the interest costs taxpayers a lot more money in the long run.
What we think people will find interesting:
- Each party seems to claim that THEY are the party that spends less money. We think most people will find it interesting to notice that each party’s budget is roughly the same amount. The main differences between parties are the deficit they create (overspending) and where they choose to spend the money.
- Military spending does not seem to follow any party. For example, military spending (as compared to GDP) went down under Reagan, Trump, and Clinton but up under Bush.
- With the exception of Bill Clinton, it seems every president is guilty of overspending. Each just to different degrees.
- Obama and Trump were the two biggest over spenders in each party.
- While the Republican party’s average per year of debt is about $400 billion, Trump averaged almost $2 trillion a year in debt.
- The second-highest overspending Democrat (Carter) is comparable to the second-lowest overspending Republican (Ford).
- Overspending is certainly the category that separates each party the most.
Sidenote:
- Each proposed budget is for the following year, so each new president runs off of the last president’s budget. Meaning each president’s first year in office is still based on the last president’s budget. For this reason, our data will be shifted one year forward. For each president in this section, we collect the data from the start of their second year to the start of the second year of the following president.
- If you remove Obama and Trump from these graphs (Both parties’ largest over spenders), you can see a clear trend of each party’s over spending habits.
- Also note: The “overspending” charts are “upside down” in the fact that the lower the bar, the worse the result. Any line BELOW the center line is BAD. The negative numbers become “Debt”.
The Data:
Because the overall budget does not seem to change much by party, and “overspending” seems to be more of the issue, we will have two charts. One represents simply the amount of money actually spent, and one represents how much overspending we had. It’s important to note where they STARTED and where they FINISHED. A president can take office at a time when spending is already high or low and then either raise or lower it over time. Was it higher when they took office or left office? As these two groups are wildly apart in these charts and bar “lengths” do not coincide, please note where ($1,000) is on each chart.
While overall spending appears to be growing at a frightening rate, we must also realize that the USA is growing over time. The nation has more people, more businesses, and more wealth in general. As with any “business”, costs will go up as the business expands. For an “overall” spending comparison, we would need to notice the chart “Spending vs GDP”.
This graph from Wikipedia illustrates why debt is so bad. You can see how quickly “interest” can turn into one of our largest expenditures.
