Fiscal Follies: The Alarming Truth About Government Waste
- Wayne F Burt Jr
- Dec 29, 2024
- 5 min read
Blog 10
As a taxpayer, I have always believed that the government was committed to ensuring our public welfare and protection. However, as I grew older and became more informed, my concern grew over how the government spends our money, which is not in line with the intentions of our Founding Fathers. We have allowed our government, through elected officials, to lose control and discretion over the expenditure of our tax dollars. Only a few conservative and democratic legislators are challenging this, but their efforts largely go unheard. It is now up to us, the taxpayers and voters, to demand that these elected leaders curb unnecessary spending and resist special interests and personal advancement.
Achieving a balanced federal budget will be difficult, but we must start by examining how the government allocates our funds. The Federal budget is divided into two main categories: Mandatory Spending and Discretionary Spending. My attention will be on the misuse of taxpayer money within the Discretionary category, which is astonishing. Simply curbing these wasteful activities can save millions of dollars and set us on the path to a balanced budget. However, let’s first understand the fundamental spending programs of the government.
Let’s start out with a simple budgetary look at the Federal Government’s Income and Expenses.
The government collected $4.47 trillion but expended $6.16 trillion. This resulted in a $1.69 trillion deficit for the US in 2023. Imagine running your household finances this way. To bridge this gap, the government borrowed from the public by issuing securities such as Treasury bills, notes, and bonds, which are bought by individuals, corporations, banks, and other investors who effectively lend money to the government in return for a guaranteed interest-bearing return. This borrowing can lead to increased inflation. Below is a breakout, withing the categories, of where your tax dollars go.
Mandatory Spending: This includes programs like Social Security, Medicare, Medicaid, and Veterans Benefits. These are largely "on autopilot" as their funding is determined by existing laws and eligibility.
Social Security: Accounts for a significant portion of mandatory spending, providing benefits to retirees and disabled individuals.
Medicare: Health insurance for individuals aged 65 and older, it has seen a steady increase in its share of federal spending.
Medicaid: Jointly financed by federal and state governments, this program supports low-income individuals and families.
Veterans Benefits: A critical part of mandatory spending, ensuring support for those who have served in the military.
Discretionary Spending: This includes defense and various other government functions, which are subject to annual appropriations.
Net Interest: Payments on national debt, a significant ongoing financial obligation.
The second part of this is what the government collects in revenue. The above chart shows government revenue coming from multiple sources with the largest being the Individual Income Tax. Below is a brief history of how the federal income tax evolved.
The federal income tax in the United States was introduced through the Revenue Act of 1861, aimed at funding the Civil War. Initially, a flat rate of 3% was applied to incomes exceeding $800.
Over time, the tax system underwent significant changes. The income tax was abolished in 1872, briefly reinstated in the 1890s, and then deemed unconstitutional by the Supreme Court in 1895. It was not until the 16th Amendment was ratified in 1913 that the federal income tax was permanently established. The initial federal income tax rates under this amendment ranged from 1% on incomes over $3,000 (or $4,000 for married couples) to a maximum of 7% on incomes exceeding $500,000. This structure established the basis for the progressive income tax system currently in place in the United States, with rates and brackets that have evolved over time.
We now understand the government's revenue source and how tax dollars are distributed across major categories. Our country's most critical challenge is to control spending and achieve a balanced budget, something not seen since Bill Clinton's presidency.
With the new administration taking office in late January, there will be a reassessment of how our Federal Government manages its finances. The newly established independent DOGE committee, led by Musk and Ramaswamy, will focus on identifying wasteful and inefficient government spending and agencies. This will mark the beginning.
This team will have plenty to target. Rand Paul for years, has created a list of wasteful projects and spending. For 2024, he highlights over $1 trillion in government waste, which significantly adds to the national debt in his annual Festivus Report. This uncontrolled overspending blame lies with our political class. Members from both political parties in Congress have voted for massive spending bills packed with subsidies for underperforming industries, ongoing military aid to Ukraine, and controversial climate initiatives. As Congress spends on its favored projects, American taxpayers are burdened with high prices and crippling interest rates. Below are just some examples of this waste exceeding $10 billion. And this has been going on for years with hundreds of projects.
Concluding Insights
As taxpayers, we hold the belief that our government should prioritize public welfare and protection. However, many of us have come to realize that the way our tax dollars are spent often strays far from this ideal. Elected officials have lost sight of their responsibility, leading to rampant waste and inefficiency in government spending. While a few legislators are attempting to challenge this trend, their voices are frequently drowned out. Now, it’s time for us—citizens and voters—to take a stand.
The stark reality is that in 2023, the federal government collected $4.47 trillion but spent $6.16 trillion, resulting in a staggering $1.69 trillion deficit. Such financial mismanagement is unsustainable and echoes the importance of scrutinizing how our funds are allocated. While mandatory spending programs like Social Security and Medicare are vital, discretionary spending—which encompasses defense and various government functions—offers numerous opportunities for cost-cutting.
With the new administration's commitment to evaluating government finances through initiatives like the independent DOGE committee, we are presented with a unique opportunity to demand accountability. Rand Paul’s identification of over $1 trillion in wasteful spending serves as a clarion call for reform. This issue transcends political lines; it affects all taxpayers, contributing to rising prices and crippling debt.
We must mobilize to demand that our elected officials curb unnecessary spending and resist the influence of special interests. Let’s make our voices heard—advocate for transparency, support initiatives that prioritize fiscal responsibility, and hold our leaders accountable. Together, we can work towards a more prudent and effective government that honors the intentions of our Founding Fathers and ensures a secure financial future for all citizens.
Take Action Now: Contact your representatives, join local advocacy groups, and stay informed about government spending. Our collective voice can drive the change we need!
Our National Debt Keeps Ticking Away (in trillions)
Comments