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Willisms

« Several Thousand Words. | WILLisms.com | Social Security Reform Thursday: Week Twenty-Eight -- Reform In Chile. »

Trivia Tidbit Of The Day: Part 135 -- Shrinking Deficit.

More Government Spending, But Way More Revenue-

Some good news, and some bad news.

First, the bad news:

Government spending in 2005 is up by 117.8 billion dollars (6.1%) over what it was at this point in 2004.

Now, the good news:

Revenues to the government are up by 211.6 billion dollars (13.8%) over what they were at this point in 2004.

[These numbers are improved from the first three months of the year, when spending and revenues were up by 7% and 10%, respectively.]

So, revenue increases are far outpacing spending increases. This is a recipe for one thing: reduced deficits.

The projected 2005 deficit now stands at 332,654,000,000 dollars. 333 billion dollars is lot of money, to be sure, but it's down significantly from the 412 billion dollar deficit in 2004.

At the end of July 2004, the annual budget deficit stood at 396.3 billion dollars; at the end of July 2005, it stands at 302.6 billion dollars, a 24% decrease, year over year. As a percentage of our economy, the recent deficits are far from any "record," and they are falling.

Which is good news.

Now, back to the bad news. Spending growth is still too high, and we're going to have to tighten the fiscal belt soon or face negative consequences.

So, just how is the government spending our money? What specific parts of government grew by $117,825,000,000 from Jan.-Jul. 2004 to Jan.-Jul. 2005?

julymts.gif

Entitlements, mostly.

*Nearly 1/5 ($22.4 billion) of the increased spending this year is on Social Security.

*18.2% ($21.4 billion) of the overall increase, meanwhile, is due to added spending on national security.

*Rounding out the top six increases, 14.5% ($17.1 billion) of the increase is additional net interest, 14.4% ($16.9 billion) is due to increased Medicare spending, 7.6% ($8.9 billion) is due to increased agriculture spending, and 5.9% ($7.0 billion) is due to increased spending on international affairs.

But what about the increased revenue? Where did it come from, thin air?

No, obviously not.

46.9% ($99.1 billion) of the increased revenue in the Federal Treasury this year is from increased individual income tax collections; 28.7% ($60.6 billion) is from boosted corporate income tax revenues.

Lower taxes leading to economic expansion, leading to increased revenues for the government, who would've thunk it?

Source:

U.S. Department of Treasury
.

-------------------------------------

Previous Trivia Tidbit: Productivity.

Posted by Will Franklin · 11 August 2005 09:51 AM

Comments

Social Security outlays up 19% in one year?

Why do I suspect that 2017 is going to come earlier than, um, 2017?

Posted by: KipEsquire at August 11, 2005 11:16 AM

Sorry, misread the graph.

Posted by: KipEsquire at August 11, 2005 11:17 AM

Good point.

However, the government also took in more from Social Security payroll taxes than last year. The projections say that Social Security will be a net money maker until 2017, but it does seem crazy that Social Security spending could rise so much without people really paying much attention to it.

Posted by: Will Franklin at August 11, 2005 11:19 AM

Yeah, Social Security itself didn't rise by 19%. Its increased outlays were just 19% of the overall budget increase. I tried to make that point clear, but I can definitely see the confusion.

Posted by: Will Franklin at August 11, 2005 11:21 AM

Very productive!...

Posted by: Zsa Zsa at August 12, 2005 10:28 PM