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.