No topic is more fraught with misunderstanding than one about fiscal responsibility and the Federal Government. We outline several areas of misunderstanding, and some perspective and a framework to be used to guide the discussion.
Where Does the Money Go?
There is a lack of understanding of where our Government spends its (our) money and the tough choices that will need to be made to reduce the deficit. I will never forget when Jillie and Marko (the names are changed) came up the driveway and upon seeing their Trump sticker, I asked why they supported him. “Because I’m tired of our Government spending all it’s money on foreign countries!” When informed that spending on other governments, including foreign aid, military assistance and humitarian aid is less than 1% of Federal spending and therefore well under .25% of GDP, Jillie was surprised. (Despite her surprise, her mind was not changed by mere facts.)
Another misunderstanding is how much money goes to “welfare” defined narrowly as money provided to the non-working poor (but without Medicaid included). In 2015, about $235BN (<6%) of a $4.11 TN dollar budget could have been classified as welfare under this definition. About a third of this ($75BN) went to food stamps which support a broad cross-section of the population (44MM at the peak of the Great Recession). Many who get food stamp assistance are not poor, for example many young people collect food stamps. [Read more…] about US Government Budget and Deficits – The US is on an Unsustainable Path, Which Only Centrist Policies Can Correct