Tuesday, November 23, 2010

Why Spending Must Be Brought Under Control

This chart slices government spending into four main areas: Social Security, Medicare and Medicaid, interest on the debt, and other spending (which includes defense). As we can see, if we don’t get our deficit and spending under control, most of our budget will be used to finance the interest we owe on our debt. Note how this share of the spending grows significantly faster than the Medicare and Medicaid part. That being said, the best way to reduce the amount of interest we pay on our debt is to reduce spending on other fast-growing budget items, i.e. entitlement spending.

The article has a chart that must be seen in order to get the full impact.


Curmudgeon said...

Come on. Extrapolating a possibly exponential curve out to 2082? You really shouldn't, as a math teacher, have let that go without some comment.

But I'll play along ... let's read the graph. The percentage surges upward in 1980-1984 when Reagan was doing those enormous deficit budgets -- to drive the Russians to bankruptcy, yes, but it still increases.

Then the economy recovered and those percentages dropped under Clinton (not that he was totally responsible for that, but it does make a good way to tweak conservatives!). Likewise, the percentages rises under GWB, hits a peak in 2010 under Obama, and then shows a tremendous downward slope under the remaining years of Obama's term (and into his next?). Then, in 2016 (when the Republican presumably gets elected), the percentage starts to climb again.

I'm not sure that's exactly what you had in mind, though.

Darren said...

It's when the health care costs really start to kick in.

Of course extrapolations that far out are silly, which is one of the reasons why I love the global warmers so much. Still, I don't see anyone arguing that our interest payments are going to go *down* any time soon.