How does the Government Cost Calculator work?
The Calculator takes in a user’s education level and age. On an individual basis it projects the user’s future income trajectory and life expectancy. On a national basis it projects future GDP growth, future federal spending and future tax revenue. It then gives users an estimate of their share of future taxes and federal spending proportional to their current and future income.
What does “typical investment scenario” mean?
The typical scenario assumes the stock market earns the same average return as it has since 1871. This percentage return thus adjusts for highs and lows in the stock market and also assumes full reinvestment of dividends. The stock market figures are corrected for inflation, are given in present-day dollars, and do not include the effects of fees, taxes, or other transaction costs.
Where do you get your data?
The Calculator combines data from the most recent annual reports published by the U.S. Bureau of Labor Statistics, the U.S. Census Bureau, and the Congressional Budget Office. For more information on our sources, please see Methodology.
I used the calculator and got my results, but what can I do with this information?
MyGovCost.org is designed as an educational tool with the purpose of informing users how federal government spending programs impact them directly. This critical piece of knowledge ties in to our larger mission of creating a more transparent view of the federal budget, and illustrates government’s ever-expanding reach into our personal lives.
Users are encouraged to share their results and the information they have learned with others by joining in the conversations available through social networking sites, commenting on their results, and using the Calculator as a reference in policy discussions where relevant. Most of all, we hope users walk away ready to get involved and fight back! Click here to learn more about how you can help or do more with the Independent Institute and MyGovCost.org.
I’m retired or currently unemployed. What should I enter?
If you are currently retired or living on a fixed income, use the net annual payments you receive as your income. If you are currently unemployed, use your most recent net annual salary to obtain an estimate of what your liability will be when you return to the labor force. Otherwise, you may use your net fixed income payment.
You skipped an expensive government program. Why isn’t it listed?
As federal spending initiatives and amendments to the annual federal budget make their way through Congress, it’s not always clear which changes will become permanent or how a particular piece of legislation will affect federal spending. MyGovCost.org does not include any pending legislation or federal spending programs that Congress has yet to finalize. If you are interested in a particular initiative or you think we may have missed something, you can contact us here.
How often do you update your data?
MyGovCost.org relies primarily on annual data from federal budget expenditure reports, census data, and annual data from the Bureau of Labor Statistics. For that data, we update annually as those reports become available. For new federal spending initiatives, we update our estimates based on the most recently available and federally approved legislative spending reports. We do not include changes to federal programs stemming from legislation still pending before Congress or unsigned by the President.
I’ve seen other calculators like this. Why is this one any different?
Most tools available to calculate government spending show per capita costs of government programs or the federal deficit. At MyGovCost.org, users get a unique picture of how these programs affect them directly because our calculations provide more detailed estimates based on your earnings, age, and education. Moreover, our Calculator provides an estimate of the value of your tax burden, had you been able to save and invest
it—thereby providing a more complete picture of what you forgo by having tax dollars spent by the federal government. Finally, MyGovCost.org includes calculations for current spending initiatives that are an important part of current policy discussion.
How can I figure out my state and local costs?
The Calculator is designed exclusively for understanding the incidence of federal government spending. State and local governments differ dramatically in the types of spending programs in place and the size of those spending initiatives. Most states have local-area policy groups that perform regional studies on the cost of state spending programs. You can increase awareness in these issues at a local level by sharing your results with others on social networking sites.
Why can’t I input gender, advanced degree, or years left to work?
The Calculator incorporates U.S. Census data to model the typical income trajectory an individual with a given level of education will have during their primary working years as accurately as possible. However, that data has some built-in limitations.
For example, in the case of gender, the U.S. Census breaks down individual income data by age and education level, but not by age, education level, and gender, which makes it extremely difficult to incorporate gender and accurately project lifetime income trajectories.
For advanced degrees, the Census data used to construct the various income trajectories by age and education level for these categories can swing wildly from year to year, so much so that in some years, there’s not enough data to be reported. This makes accurately modeling those income trajectories pretty problematic. In this case, since fewer than 10 percent of Americans have earned advanced degrees, we chose to focus on the more than 90 percent of Americans who have earned up to a bachelor’s degree.
Finally, the option to consider the years left to work was not added because of the potential complexity that would need to be accommodated. Aside from considering early retirement, which would be the simplest option, there’s also the situation of delayed entry into the workforce, or prolonged career sabbaticals (say an individual leaves the workforce to be a stay-at-home parent for a decade, goes back to school, etc.).
The best way to think of the Calculator is that it shows how an average American with the given initial age, income and selected education level will fare over a long period of time. That provides for two levels of insight that can be gained from the calculator: one for the average American, the other for how you compare with the average American.
If I plan to stop working in 5 years, how do I know what my costs will be?
The answer to that question hinges on what you expect your post-working income will to be. One way to determine the cost of government in your post-working life would be to enter your current income in the tool calculator, recording what your costs will be for the remaining five years you will be working, and then to enter the estimated annual income you might expect after you stop working, recording what your costs will be from six years out into the future. Adding the combined results together will give you a good idea of what the cost of government will be for your unique situation.
If that sounds complex, it is! The Calculator aims to provide a simple interface that will work to deliver solid results for a very wide variety of users. That design choice limits its ability to directly consider every possible scenario a user might wish to consider. It’s not impossible, it just takes some additional work on the part of the user.
Can I know what my expenditure was last year alone? For the last 5 years alone?
The Calculator was designed to start with the data for 2009 and look forward for an individual from the age they enter until the commonly recognized age of retirement of 65. The data charts are capable of reporting what each expenditure or cost is for any given age or year, which means that you could simply record the data for your specific years or ages of interest, then add them together to get the sum you seek.
I input my figures and calculated it for the total and then did so for each government program; why don’t the numbers add up?
The Calculator considers all government expenditures and sources of receipts, which are not all listed as part of the available options to select. Here, in the interest of not overwhelming users with the full range of things upon which the government spends taxpayers’ money, the available choices to select were narrowed down to those that might be of special interest to a wide range of taxpayers.
Why didn’t my comment appear in the guest book or the blog?
In order to reduce commercial spam, all comments on MyGovCost.org require the user to submit his or her email address. (Don’t worry—your email address will remain invisible to the public.) On rare occasions, should we find a user’s comments to be distasteful or off topic, we will remove this material at our discretion. More often, our server may simply be experiencing a delay in updating reader comments.
What personal information does MyGovCost.org gather?
- Does MyGovCost.org store the data I enter into the calculator? We do not associate inputs for age, income, and education with any personal information (such as name, IP address, or email address) received during your visit to the site. We want you to feel free to use our Government Cost Calculator for yourself, your family, and your friends without concern for your private data.
- What does MyGovCost.org do with my email address? If you contact us using the email web form, we may send you updates for MyGovCost.org. You are always free to unsubscribe by clicking the link at the bottom of the email newsletter message, or by using the interface on the left side of any page on this website. Also, you may elect to sign up for updates about MyGovCost.org and other email updates from the Independent Institute.
- Does MyGovCost.org share my address with other groups? No. We do not share our email lists with outside organizations. We may occasionally make our postal mailing list available to organizations that we think may interest you.
- How secure is information about me? We work hard to protect the security of all of the information we receive from you. Any data about names and email addresses is maintained in our internal systems, which are not accessible from the web.
What does each of the federal spending categories include?
- Afghanistan Military Operations. This category represents the “above typical” spending that is associated with ongoing U.S. military operations in Afghanistan. “Above typical” is defined as the level of spending projected for national defense activities by the Congressional Budget Office, in its 2012 Long-Term Budget Outlook, following the then anticipated drawdown of these activities by 2019. The CBO assumed, however, that cuts in basic national defense spending that were initiated as part of the Budget Control Act of 2011 would not be enacted and that the drawdown of forces in Afghanistan would occur over a longer period of time. President Obama’s budget proposal for the 2014 fiscal year indicates that the drawdown of overseas forces will take place by 2016 and also indicates that it is likely that a good portion of the budget sequester reductions in spending will be permanent, which results in lowering the “typical” level of spending for national defense activities from the previously assumed 3.4% of GDP to 2.8% of GDP in 2018.
- Economic Stimulus Spending. This category represents the “above typical” spending that is associated with the federal government’s expenditures intended to generate new economic activity, such as those associated with the American Relief and Recovery Act of 2009, and includes financial bailouts to the states to support Medicaid programs. “Above typical” is defined here as the level of spending projected for economic stimulus above the levels established in Fiscal Year 2008, the last full budget year prior to the fiscal crisis of 2008.
- Financial System Bailout Spending. This category represents the “above typical” spending associated with Treasury Department’s ongoing efforts to bail out the operations of large financial institutions, such as those supported by the Troubled Asset Relief Program (TARP), and to sustain failed government-supported enterprises such as the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac). “Above typical” is defined here as the level of spending projected for economic stimulus spending above the levels established in Fiscal Year 2008, the last full budget year prior to the fiscal crisis of 2008.
- Recession Welfare Spending. This category represents the “above typical” spending associated with the economic recession that was declared to have begun in December 2007. It includes the ongoing additional expenditures for unemployment compensation, housing assistance, food stamps and other income security programs. “Above typical” is defined here as the level of spending projected for economic stimulus spending above the levels established in Fiscal Year 2008, the last full budget year prior to the fiscal crisis of 2008.
- Agricultural Research and Farm Subsidies. This category represents the government’s expenditures managed by the Department of Agriculture. It includes farm income stabilization (subsidy) programs as well as agricultural research and services.
- Disaster Relief and Insurance. The Disaster Relief and Insurance component of government spending is largely represented by the activities of the Federal Emergency Management Agency, which is part of the Department of Homeland Security, and a variety of government-backed natural disaster insurance programs.
- Economic Development. Much of the Economic Development spending is administered by both the Department of Housing and Urban Development and the Department of Commerce. It includes community, area, and regional development, as well as economic “stimulus” spending for the advancement of commerce.
- Education. This category includes the government programs administered by the Department of Education, such as spending on elementary, secondary, and higher education, vocational education, educational research, and a variety of education-related training and employment programs.
- Energy. Energy spending includes the activities of the Department of Energy, including supply, conservation, emergency preparedness, and regulation.
- Environment and Natural Resources. The Environment and Natural Resources category spans two government departments: the Environment Protection Agency and the Department of the Interior. The Department of the Interior oversees United States water resources, conservation and land management activities, and recreational activities associated with federally controlled resources, whereas the Environment Protection Agency enforces regulations related to pollution control and abatement programs.
- Foreign Aid and International Affairs. Foreign Aid and International Affairs covers the expenses associated with international diplomacy, security, and foreign aid programs that are under the control of the Department of State.
- Government Administration and Personnel Benefits. Government Administration and Personnel Benefits covers all the spending associated with the operation of the federal government, including the executive, legislative, and judicial branches. It includes the federal government’s employee retirement and benefits programs, including those for veterans that are administered by the Department of Veterans Affairs.
- Justice and Public Safety. The Justice and Public Safety category includes the costs associated with the Department of Justice, such as federal law enforcement and correctional activities, as well as Consumer and Occupational Health and Safety, which is administered by the Department of Health and Human Services.
- Medicaid. Medicaid provides both healthcare and long-term care to low-income individuals, including the elderly and disabled. This category also includes the Children’s Health Insurance Program (CHIP), which provides healthcare to low-income children and parents. Although both Medicaid and CHIP require states to make matching payments from their tax revenues, only the federal government’s portion is included in this category.
- Medicare. Medicare provides health insurance coverage for the growing Age 65+ population of the United States. Medicare is primarily funded by a dedicated payroll tax.
- National Defense. National Defense primarily reflects the underlying costs of the Department of Defense, including the cost of personnel, housing, construction, equipment, and military operations, such as those in Iraq and Afghanistan. National Defense spending also includes spending on nuclear development programs.
- Net Interest on the National Debt. Net Interest on the National Debt covers the cost of borrowing to support government expenditures in excess of the amount of the government’s total tax collections. The Department of the Treasury is responsible for administering the nation’s debt.
- Science and Health Research. The Science and Health Research category spans a number of general science and basic research programs operated by a number of government departments, such as the space flight programs and operations under the National Aeronautics and Space Administration. Department of Health and Human Services programs related to health research and training are also included in this category.
- Social Security. Social Security mostly provides retirement benefits to eligible retired workers, but it also provides insurance benefits to the spouses and minor children of deceased workers, as well as workers who become disabled. Social Security is funded primarily by a dedicated payroll tax.
- Transportation. This category covers the spending managed by the Department of Transportation. This includes spending on highways and ground-based mass transit systems, as well as air, water, and other transportation systems.
- Welfare. Welfare incorporates a number of programs that are administered through the Department of Health and Human Services, the Department of Labor, and the Department of Housing and Urban Development, including such programs as Unemployment Compensation, Housing Assistance, Food and Nutrition Assistance (food stamps), and other Income Security programs.
I have suggestions for this site; who should I tell?
If you have a suggestion for how MyGovCost.org could improve our services or simply would like to make a recommendation for the site, please contact us here.
Who funded this project?
MyGovCost.org has been made possible by the generous support of private donors who share our concern over the continuously growing level of federal spending. In an effort to make trillions of dollars of government debt easily understood on a personal level, these donors have joined with the Independent Institute to create this new website and multimedia tool.
How can I help support MyGovCost.org?
If you share our concern about the federal debt and the ever-expanding reach of the government, you can make a donation to support MyGovCost.org. To learn about other programs of the Independent Institute, membership benefits, and ways to help us to promote liberty, peace, and prosperity, please visit http://www.independent.org/membership/. For any additional questions regarding donating or partnering with the Independent Institute, please call our Development Associate, Terra Strong, at 510–632–1366.