Question

Discussion: Is This What We Should Spend Our Money On?

No unread replies.No replies.

The Federal budget is made up of three parts for planning purposes: Mandatory spending, which is enabled by ongoing appropriations, and so does not require new spending authorization; Discretionary spending, which has to be re-authorized each year; and the Interest on the Federal debt. For our purposes, because we are not looking at the legislative process, it is one single large spending pool. Below is overall Federal spending in the USA in 2018

2018 Federal Spending.  (Links to an external site.)View the document or the Interactive Graphic.

So you can see that in 2018 Federal spending added up to $4.1 trillion, or 20% of then US GDP of $20.5 trillion. Obviously this was more than revenues, which at $3.3 trillion left a deficit of (a bit less than) 800 billion dollars, or 3.9% of GDP. We spent 24% of Federal money on Social Security + 14% on Medicare, which = 38% and growing of all US Federal expenditure on retired people. Another 15% of the entire budget in 2018 was spent on the US military. In addition we spent 9.5% on Medicaid, which is medical assistance for poor people. And we spent 15.6% on natural resources and the environment, general science, space & technology, general government, community & regional development, agriculture, administrative costs of Medicare & Social Security, energy & commerce, and housing credit programs. Another 7.9% and growing was spent on servicing the national debt. About four-fifths is spent on retired people, the poor, the military and the Federal debt.

On the Federal level, education spending is allocated to Pell grants, work-study, guarantees of student debt, and Head Start, a program for poor pre-school children. The great majority of spending on education in the US is on the state and local levels, although the Federal government plays a regulatory role.

Similarly, with respect to the environment, the Federal government plays primarily a regulatory role -- in this case, most spending in terms of mitigation is by private industry. The largest exception is the national park system; there are also state and local parks and reserves.

Do you think these are the best priorities for US Federal government spending? Do you propose some other set of priorities? If so, what? Write about three paragraphs. Please use outside academic-level sources to support your position.

link: https://www.cbo.gov/publication/55342 ( 2018 Federal Spending)

Answer 1

US Federal Government can spend money in the following way:

• Right-size federal government activities and prioritize spending toward its highest uses. Programs like Obamacare, Medicare, Medicaid, Social Security, and welfare should be given most importance.Citizens of America should receive affordable healthcare. This is because healthy citizens means healthy economy. Government should enact laws to prevent the government from discriminating with regard to contracts, grants, licensing, accreditation, or the award or maintenance of tax-exempt status against any person or group on the basis of these beliefs. Education including primary and higher education should also be given priority as children are the future of nation and education will result in bright future and developed economy full of civilized citizens.Government should spend on protection of life and conscience. Insurance and healthcare policies promoting abortion should be discouraged. Government should spend money on infrastructural needs which are of vital importance and rest should be left on the decision of state and local authorities. Government should provide solutions that would minimize losses on existing unfunded pension promises and prevent unions and employers from making promises they cannot keep. Development of free trade should be emphasized by encouraging imports, increasing exports and removing unnecessary tariffs.
• Reduction in Debt. The government should formulate policies to reduce the national debt and improve the standard of living of people.Fed's involvement in monetary policy should be reduced and central bank should introduce some rule based policies to have a stable and efficient monetary system.Quantitative Ease programs should be given priority. Fed should stop paying above market rates on reserves.
• Efficient Tax System. The tax system should be formulated in such a way that least burden is out on taxpayers. Complex tax system hampers economic growth.The new lower tax rates and other changes in tax reform have already begun to increase productivity, job creation, and real wages. A consumption tax based system should be adopted instead of currently used hybrid income consumption tax.Only necessary taxes should be levied.
• Solid National Defense. A strong defense system is of utmost importance in today's time. To meet the threat of terrorism necessary sum of funds should be spent to strengthen defense system which includes acquiring new weapons, protecting boundaries, acquiring new aircrafts etc. As there is possibility of World War Three to occur any time, so national defense cannot be ignored.