As a follow-up to the last BotN article on government spending over time, I decided to take a look at US federal government spending right now in a bit more depth, to see where all the money is going.  This information is readily available (source), but I thought it would be interesting to re-contextualize it by calculating the category expenditures on a per capita and per tax unit basis (a tax unit is one or more individuals filing a tax return).  To get the per capita basis, I took the fiscal year 2021 federal government spending and divided by the estimate of the US population on Sep 30, 2021 (332,797,562 people – source), since that was the last day of fiscal year 2021.  For the per tax unit basis I decided to do two calculations.  For the first tax unit column I adjusted the spending by multiplying it by 86%, the portion of government revenue that comes from individual taxes (source), and then divided it by total tax units (178,140,000 units – source).  The result shows the theoretical tax burden per tax unit if taxation covered the entirety of federal spending and was equally distributed.  For the second tax unit column I adjusted the spending by multiplying it by 65%, the approximate portion of government revenue that comes from tax units that pay income tax (50% income tax revenue + 36% payroll tax revenue * 43% tax units that pay income tax), and then divided it by the number of tax units projected to pay income tax (76,490,000 units – source).  The result shows the theoretical tax burden per income tax paying tax unit if taxation covered the entirety of federal spending and was equally distributed.  With the background out of the way, I present the breakdown of where the US federal government is spending money, first by category and then again by agency.  The totals do not match exactly due to rounding and possibly due to accounting discrepancies (note that the official total spending for 2021 per my source – a federal government agency – is $6,818 Billion).

US Federal Government Spending by Category, 2021

 

US Federal Government Spending by Agency, 2021

 

The first thing that stands out is how much was spent on “Income Security”, which I assume primarily represents the payouts justified by COVID (along with regular welfare and unemployment benefits).  I also assume that this is the main contributor to why the Treasury Department pulled out the surprise number one spot for highest-spending agency.  I hope that this line item will be phased down quickly as things return to normal following the pandemic, but even so this profligacy only accounts for 59% of the $2.77 Trillion deficit for this year, so the metaphorical belt will need further tightening to put the government’s fiscal house in order (I’m not holding my breath).  That interest line item will only grow if current trends continue, and I presume (especially in this fine company) that I’m not alone in being unhappy that my government is spending over $1,000 per person (and over $1,700 per tax unit) for the pleasure of having been irresponsible in the past.  I could think of many better uses for that money (not all of which, admittedly, would be responsible either).

The Social Security and Medicare line items tell us how much the government is spending per person, but as each of those categories only benefits a select group of people (primarily the elderly, although some social security benefits go to other cases) I decided to do some quick additional calculations.  Given that there are an estimated 54.1 million Americans age 65+ (source), the government spends approximately $22,098 on Social Security and $12,874 on Medicare per senior.  Not quite as much as I would have guessed, honestly, but then again it’s not distributed uniformly.  Collectively these old-age programs account for approximately 27% of all government spending in 2021, which gives us a pretty good idea where the government’s (and by proxy the voters’) priorities lie.

Another huge line-item is Healthcare, which primarily consist of Medicaid but also includes other assistance programs.  Since there were 82,761,078 Americans enrolled in Medicaid and CHIP in 2021 (source), we can approximate that $9,628 was spent per person who received government healthcare under this line item.

Defense takes up 11% of the budget and Veterans benefits another 3% of the budget, so approximately 14% of government expenditure goes to maintaining the nation’s military.  Given that the Department of Defense employs 2.91 million people (source) the country spends approximately $259,381 per person to pay, equip, and support them.  With approximately 18 million veterans in the country (source), the government therefor spends approximately $13,000 per veteran to support them.

If the department of education had been eliminated like the Republicans once promised, we would be saving $782.46 per person.  As it stands, with approximately 77 million students in the US (source), the federal government is spending approximately $3,380 per student.  That would make for a nice scholarship if we moved to a voucher system and cut out the middle-man.  Given that states and localities cover the bulk of the cost of running public schools in this country, this per student expenditure by the federal government is sizeable.

The Office of Personnel Management surprised me at its size, and considering the US Federal government has 2,181,106 civilian employees (source), that means the government spends $49,791 per employee to manage them.  Seems a bit steep if you ask me.

The offsetting revenue, for those who wonder, comes primarily from employer contributions to employee retirement.  That this is accounted as income rather than expenditure strikes me as suspicious, but I am not an accountant so perhaps this is entirely above board (if we have any accountants among the readers, please let me know).

A final note, the spending per tax unit columns indicate to me both the magnitude of the government’s deficit spending and the magnitude of the progressivism in the tax code.  As someone who earns an above average income, I (thankfully) pay nowhere near the $58K that the government spends per income tax paying tax unit, which means that the large difference is coming from somewhere else.  Hats off to you rich folks who are picking up the tab, and pity to all of us who will (and are – inflation is at a 30 year high already) pay the consequences for the irresponsibility in the system.

Let me know if you see anything else interesting/surprising/disappointing/alarming in these statistics.  And since we have many non-American members of our commentariat, let me know if there’s any interest in taking a look at how other countries spend their money.  If there’s interest, I’ll probably look into whichever country gets the most votes in the comments.