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The Arch of U.S. Government Spending


Monday April 24th, 2017   •   Posted by Craig Eyermann at 6:28am PDT   •  

One of the great difficulties of trying to describe the sheer amount of money that the U.S. government processes each year is that the numbers are so large that they lose all sense of human proportions.

The Manhattan Institute’s Brian Riedl took on the challenge for the amount of money that the U.S. government will either spend, tax, or borrow during 2017, breaking these categories down into their basic components by expressing them in terms of the average U.S. household.

Unfortunately, those numbers and how they fit together can still be pretty hard to visualize, which presents a new challenge — one which I hope the following chart showing the “arch” of U.S. government spending, taxes and borrowing communicates. (Please click the chart to open a larger version of it!)

Why show this data in the form of an arch? In order for the U.S. government to sustain its spending, it has to be supported by a combination of the income, payroll, and excise taxes along with the fees and other non-tax revenues it collects. If those taxes fall short of supporting the column of spending, that gap has to be made up with debt; the U.S. government must borrow so that it can spend as much as elected politicians and federal government employees choose.

Visually, an arch makes that connection. But perhaps just as importantly, its spending leg reveals the major components of how the U.S. government spends the money it obtained through imposing taxes or borrowing.

In the chart above, we’ve organized the spending leg from the largest expenditure category to the smallest, so that looking from the bottom of the arch to the top makes it easy to see where most of the U.S. government’s spending goes. Those spending programs include Social Security, Medicare, anti-poverty programs (which predominantly means low-income health insurance programs like Medicaid and the Affordable Care Act, but also includes nutrition and housing assistance programs), defense spending, net interest payments on the national debt, veterans benefits, federal government employee retirement benefits, education, and, finally, a large number of smaller government programs and agencies whose spending has been grouped together.

The arch of U.S. government spending also provides a visual indication of how much of that spending has to be supported by borrowing, which provides a gateway into thinking about how the amount of spending would have to be changed so that it could be supported without borrowing or without adding to the burden of taxes. Do you nibble at the top, where most of the U.S. government’s smaller discretionary spending programs are positioned? Or do you preserve those and reduce the size of the bigger “mandatory” expenditure portions of the spending leg? Or do you not touch the spending leg at all and choose to increase the burden of taxes and/or borrowing?

At various times in U.S. history, elected politicians have chosen to do each of these things. Sometimes simultaneously.

The arch format can provide a lot more insight than you would ever get from a more typical bar chart presentation of this kind of data, much like what the U.S. Treasury Department regularly features on the covers of its monthly treasury statements.

I admit that I may be a bit biased, in that I grew up in St. Louis and am probably predisposed to appreciate the aesthetics of the arch, but when a simple visual element can communicate such a wealth of information, it’s hard not to take notice, and you don’t have to be from the Show Me State to see it!




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