This Ain’t the Family Budget!
I find it interesting that whenever the national budget is in the press, we talk about it as if it were an average family budget.
Perhaps it’s not unreasonable if we consider ourselves a very large family that does a tremendous amount to help out family members and neighbors within its own community and in neighboring communities, while also supporting the world’s largest military. So, like many American families, our model national family is clearly a striver. Aiming for what is best for themselves and their community.
Though, unlike many American families, this model American family, even when striving, is not able to seek a pay raise, or any other way to increase its income. Why is that? Why are we a family where the only choices we’ve got is to constantly tighten our belts? And let’s be clear that this belt tightening brings considerable hardship to many members of our “family.”
If we are going to talk about what our “family” makes and spends, let’s take a look at the details. Below is the breakdown of US Fam/Fed spending for the last full financial year.
It is often said that the US Govt is an Insurance Co with an Army, and we can see that it’s largely true, looking at the outlays by function above.
Looking at the Receipts by Source, it is amazing how little out world-dominating Corporations chip in toward our national well-being. Make of that what you will.
I am sure everybody feels it when you see Individual Income taxes as the number one contributor. We are all also paying into the Social Insurance and retirement bucket too, for current, and hopefully future, Social Security and Medicare benefits. We all pay 6.2% into this, up to the first $168.6k of income, after that the biggest earners pay in no more.
Since we are talking about it, let’s take a closer look at Income taxes and who pays.
One of the biggest things that pops out at me as I have been looking at tax and income-related data is that 50% of taxpayers make less than $44.3k per year and these folks pay just 3.1% of all income taxes collected. This is just over 74m taxpayers/families. From another set of stats, we see that the bottom 40% of families own about 8% of our nation’s wealth.
On the other end of the spectrum there are almost 1.5m taxpayers/families who are the top 1% and who make $550k and up per year. These families pay almost 40% of all taxes and own 24% of the nation’s wealth.
In between are another 72.6M families/taxpayers, paying 58% of all taxes.
In the end, no matter how you slice it, I just end up thinking of the legendary bank robber, Willie Sutton; and to paraphrase a quote he denies saying” why do you need to tax the wealthy (and corporations) more? Because that is where the money is.
The simple fact is, we want to have a solid society with the services that provide for basic needs so all citizens can thrive, with excellent schools, housing and healthcare.
If we want America to be a place where our infrastructure is not falling apart with roads and bridges crumbling or lead and other contaminants in water systems.
To be an America that can manage the ongoing parade of natural disasters that continue to devastate communities all across the country, or unnatural disasters like the continuing opioid crisis and growing mental health crisis without leaving many behind.
All that before we even consider what it takes to have the military might to lead in all regions of the world.
Being a global superpower is not cheap (15-20% of our total budget) Withdrawing from the role would be expensive as well.
The key is, if we want to think of our national spending as a family budget, we need to do what a real family would do: look at what the expenses are, talk about it and discuss what is most important to the overall well-being of the family and then decide which are worth the cost and which are not.
But if we want to be the great Global Power, we all know and love, we need to pay for it.
So, it is up to each and every one of us to consider what kind of America we want to live in; the kind of society we want our America to be.
We can try to alleviate the suffering around us, to make a stronger society, or we can just allow our people, our infrastructure and our society to continue to crumble.
I say to each and every one of my fellow citizens, what is your American Bedrock? And are you ready and willing to take the action that is needed to bring about that bedrock for yourself, your family and all Americans?
Graphic Source: Monthly Treasury Statement – Sept 2023 report
