Where your money goes
“People value only what they pay for.”
– Smith’s law of consumer choice
When your tax dollars go to
Other than tossing them into the air in glee, of course …
What, in other words, are your taxes paying for?
The FY 05 Federal budget is just over two trillion dollars. For those of you scoring at home, that’s 2,000,000,000,000. If represented by one-dollar bills that were taped end to end, they would stretch from the Earth to the Sun and back again.
We currently spend two astronomical units’ worth of money!
Numbers so large are beyond the scale with which we are mentally adept, but they snap into focus when brought to a human scale. So let’s compress the entire federal budget into a single $1.00 (a bi-tera-buck, as it were), where does that buck go?
We have to make the pie higher …
A quarter of the budget goes for national defense and interest on the national debt. Fully half goes for domestic entitlements: social security, income security, Medicare, and health. Entitlements are promises to spend that we have made as blanket open-ended commitments: all who qualify get all benefits promised. By making them entitlements, the Federal government has in effect surrendered some control — some large amount of control — over its spending, since the entitlements grow as need and costs grow. Cutting back entitlements means voting against them — which takes political courage, a quality that seems to correlate with political masochism.
Between commitments and entitlements, fully 83% of the budget is now spoken for.
The 17 cents that are left — that is, roughly one-sixth of the total revenue — falls under the broad heading, ‘domestic discretionary spending’. This is vote lingo for things we debate and appropriate that are then spent in the
It’s in this context that we can now measure HUD’s $32 billion annual appropriation. It represents about 7.5% of domestic discretionary spending, which itself is only one-sixth of total appropriations, so the HUD budget is under 1.25% of total spending.
One and a quarter cents on the dollar.
And what’s the biggest Federal housing program? Where does it sit in the appropriations?
Well, it’s not an appropriation at all — it’s a ‘tax expenditure’, that is consciously foregone revenue through a special tax provision — the mortgage interest deduction, which cost something over $66 billion last year, more than twice the entire HUD budget.
Don’t get me started …
