Tuesday, February 25, 2014

The Federal Budget over time has become one that does less and transfers more. Is this a good thing, bad thing, or just a thing? See graphic here...

Here is a graphic from NPR that shows the ebbs and flows of  US Federal Budget SPENDING as a percent of Gross Domestic Product.

I doctored it a bit to show the change in the composition of Federal spending in the categories of  Non-Mandatory ("Discretionary") and Mandatory (Non-Discretionary") from the 1970's to 2013.

We used to be able to "do things" with Federal dollars.  Now we transfer Federal dollars from one person to the other.  If the budget is relatively fixed (in terms of a percentage of the economy) and you are forced (by demographics) to re-allocate that fixed budget in different ways then something has to give...Right??

Just throwin' it out there...


  1. You said it right "We used to be able to "do things" with Federal dollars." Now we don't. Wonder why?
    Reason: This new found fear that our federal government will run out of money! Which is really unfounded if you understand how federal finances work.
    Since we no longer use Federal dollars to "do things" which helps create good jobs, the federal government is now forced to spend more on "transfer payments". Again the term "transfer" is a misnomer if one understood how federal finances work. There is no transfer from one person to other. These are all federal spending period. Our federal taxes do not fund anything at the federal level.

    1. Netbacker...Thanks for the comment. You had me up to the last sentence! LOL! Got lost there. A further explanation or a link to a resource would be welcome. I am slow, but willing to learn. :)

    2. I think I found a good start at the site you recommeneded.


      I will spend some time looking at this.


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