US Government Budget Breakdown: 50 Years Ago vs. Today

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Below is a chart of the breakdown of government spending from 50 years ago, 25 years ago, and today. There are many differences between the political and economic environments of 1962 vs. 1987 vs. 2012, but I still think it’s still very interesting. Image credit to Lam Thuy Vo of NPR Planet Money, using data from the Office of Management and Budget. Click on chart to view original post and additional commentary.

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  1. Considering that Medicare + Medicaid + Medical benefits covered in Defense spending is about 25% of the government’s spending already, why are we even debating about the need for health care coverage for all. We’re already paying for it so we might as well just figure out better ways to administer health coverage so that the overall cost of health care in the US goes down.

    It’s just unfortunate that self-interests and politics keep the US from developing a health care system that will actually work for most Americans.

  2. I plan to vote Phoenix for President in 2016! Huzzah!

  3. I enjoy distribution graphs like this, but it would be even better if they included inflation-adjusted government spending for all three years. Then we could determine not only if we’re spending a bigger proportion on a given category, but also if we’re spending more raw dollars. The linked article briefly mentions numbers for two of the years, but I don’t believe they are inflation-adjusted.

  4. Interesting. Would also be interesting to see where the money comes from as a %. While social programs are a higher % now they also contribute higher amount of tax revenues. Medicare didn’t exist in 1962. Tax rates for social security and medicare have more than doubled in the past 50 years.

    Clearly the biggest shift in the past 50 years is how much of the money goes to social security, medicaid and medicare. Of course most of that is due to an aging population and increasing health care costs.

  5. Jenna, Adaptu Community Manager says

    Wish education had a bigger slice of this chart.

  6. Fred Fnord says

    Graphs like this bother me for a multitude of reasons.

    For one thing, they imply things that aren’t so. For example, the implication is that Social Security is coming from the same ‘pool of dollars’ that the rest of the spending is, when in fact it has its own dedicated revenue stream, trust fund, etc.

    For another, ‘safety net programs’, and for that matter Medicaid and even Social Security (mostly via early retirement), have grown enormously *because our economy is currently in terrible condition*. When sixteen percent of the people in the country want to work more than they are currently working (if they are at all), then a lot more people than usual will be using the safety net than ordinarily do. If we were to actually fix the economy, the safety net programs (aside from Social Security… once someone is collecting it, they don’t tend to stop) would immediately shrink considerably. Comparing safety net spending in 2011 (in the middle of the worst economic downturn since the great depression) to that in 1986 (in the middle of the Reagan boom) is entirely missing the point.

  7. The comments are a little too defensive–commenters imagine that this graph threatens the case for social spending and start generating excuses. Classic closed-minded thinking.

    In fact Social Security is due to outstrip contributions in the not very distant future. And yes an aging population is demanding increases to social spending–which is precisely why this spending is going to be a problem in the future.

    As for this comment: “We’re already paying for it so we might as well just figure out better ways to administer health coverage so that the overall cost of health care in the US goes down.”…this is just nutty. Saying we might as well have the government pay for healthcare, adopt single payer, or centralize administration (whatever that means) because we are already paying for it is about as illogical as claiming that cutting taxes on the rich will lead to massive growth.

    Health care needs to be reformed, but not by insulating consumers from even more costs. Think about it, how can an insurance scheme work when its being made to pay for every procedure? This is precisely why costs are out of control. Insurance should be made to provide catastrophic coverage only, with ordinary use of health care paid for by the consumer. This is the only way to reintroduce market pressures on cost. It simply won’t work with rationing, guaranteed coverage for everything, and similar schemes.

    Or we could just continue voting ourselves wish lists of goodies and wait until we face a serious economic crisis like the EU is facing now. But that is an extremely reckless approach. (And no, I don’t support the proposals of either major party, or those of the libertarians for that matter.)

  8. Hannah raises some interesting points. Entitlement spending is poised to skyrocket into unsustainable territory by virtue of the current demographic shift alone. It would be better if consumers paid the true cost of care, while being (yep) mandated to carry catastrophic insurance.

    This is exactly the system in place in Singapore: universal catastrophic health care plus HSAs with unlimited contributions – and the HSAs can even be bequeathed. It works rather well.

    The problem of course is that the per capita income and educational levels of this tiny affluent nation hardly translate to the US population. Most Americans, sadly, don’t have the will or the intellect to manage an HSA. And I think we can figure out how they’d react to federally-mandated insurance!

    (Aside: If you knew me, you’d know I’m not exactly a laissez-faire type, despite what you may think after reading this. Please don’t try to paint the posters to this thread with either a red or blue brush – you’re better than that.. right?)

  9. Greg O'Neal says

    Very interesting comaprison of expenditures, thank you.
    Do you have the data for comparing revenues in 1962, 1987 and 2011 as well?
    I think it would be interesting to see the overall comparison for those years.

  10. Greg O'Neal says

    It’s dissapointing that Social Security is viewed as just another government entitlement/expense. I’ve paid in along with my employers for over 40 years so I could have a retirement benefit. This large some of money plus interest earned should have been safeguarded in a trust for my future withdrawl. Unfortunately the government took all the cash from the trust fund and replaced it with “IOU’s” from the general fund.
    I dislike the term entitlement and I wouldn’t ask for something for nothing, I would just like my money back.
    It’s no wonder there is lack of trust in our government.

  11. Greg O'Neal says

    Can you tell me if the numbers in the link below are correct?

    I just looked at the offical US Budget, amazing, it impressed me as being written more by a reelection comittee than by accountants. Not a private sector budger for sure, maybe government budgets should be contracted to a private accounting firm.

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