Where the Money Goes

Kevin Drum has a nice graphic on where federal spending goes.

I think most people don’t know this:

Note further that despite the 21% outlay, Social Security has for many years actually reduced the deficit, because the social security tax has been taking in more than social security pays out.   That said, this year may be different: due to the super recession, payroll taxes are down (few jobs) and involuntary retirements are up (ditto).  But the built-up surplus in the Social Security trust fund should cover it for a couple more decades at least; and the tax changes required to keep Social Security solvent until the age distribution bulge sorts out are pretty small. (Health care spending, aka Medicare, is a much harder story.)

Update: Here’s a really good CBO chart showing social security’s past and projected contribution to total federal spending, and thus to the deficit.

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One Response to Where the Money Goes

  1. Earth says:

    Wouldn’t it maybe be a Good Thing if SS’s tax receipts are soon less than disbursements? Because that would require using the SS Trust Fund, wouldn’t that fact, in itself, be helpful in destroying some the BS that’s corroded into public understanding of SS?

    I mean, if the Trust Fund gets used, any the sky doesn’t come crashing down, won’t that kind of invalidate a lot of nonsense that’s been pumped out — that the trust fund “doesn’t exist” for a start?

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