A look at US Public Spending

A wonderful group called the National Priorities Project has taken some time to graphically illustrate items such as where our taxes go and what is the relative priorities of national spending.  Using projections from 2015, an interesting picture emerges.

First, let's look at overall spending.

At first cut it is obvious that a big portion of money is spent on two major social programs, over 60%.  These are mandated by law and so Congress has no ability to reduce these expenses within the budget process.

Given the interest component on the national debt (currently at 6%), this only allows for 30% discretionary spending.

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As you can see above, much of this is spent on Defense items (over 60% when we include Veteran Benefits).

So, when it is all said and done, all the political posturing often focused on these other issues (education, energy, science, transport, etc.) is really about 12% of the budget.

The most dangerous element of this mix is the interest on the debt.  With interest rates the lowest in decades, at less than 1% for short term treasury bill and notes, it is still at 6%.  If interest rates were to only double, which they will surely to at some point, the expense suddenly leaps above 10% of spending. If interest rates move to historical rates of 5% or 6%, then the payment on interest will overwhelm any discretionary and much military spending.

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Another way is to view this from the point of view of how are taxes spent.  This National Priorities chart below takes the above illustrations (from 2013) and shows it in a slightly different fashion.

It’s no secret that the world’s population is on the move, but it’s rare to get a glimpse of where that flow is happening. In a study released in today’s Science, a team of geographers used data snapshots to create a broad analysis of global migrations (diagram below) over 20 years:

 An article on Quartz by Nick Stockton provides a bit more analysis by country. 

 Migration data is counted in two ways: Stock and flow. “The stocks are the number of migrants living in a country,” says Nikola Sander, one of the study’s authors. Stock is relatively easy to get—you just count who is in the country at a given point of time. Flow is trickier. It’s the rate of human traffic over time.

While the results of the migration study aren’t particularly groundbreaking, there are two interesting insights:

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1) Adjusted for population growth, the global migration rate has stayed roughly the same since around  since 1995 (it was higher from 1990-1995).

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2) It’s not the poorest countries sending people to the richest countries, it’s countries in transition—still poor, but with some education and mobility—that are the highest migratory contributors.

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“One of the conclusions they make in the paper, is the idea as countries develop, they continue to send more migrants, and at some point they become migrant-receiving regions themselves,” says Fernando Riosmena, a geographer from the University of Colorado, who did not contribute to this research, but is collaborating with one of the authors on a future paper.

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A few other noteworthy results:

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1) The largest regional migration is from Southeast Asia to the Middle East. This is largely driven by the huge, oil-driven, construction booms happening on the Arabian Peninsula.

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2) The biggest flow between individual countries is the steady stream from Mexico to the US. (In fact, the US is the largest single migrant destination)

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3) There’s a huge circulation of migrants among sub-Saharan African countries. This migration dwarfs the number leaving Africa, but the media pay more attention the latter because of the austerity-driven immigration debates in Europe.