Where Does Gov Spend All That Money?

Most government spending - federal, state and local - is refreshingly simple. Below are categories of government spending as a share of the whole and as a share of Gross Domestic Product (GDP)


Expected Federal, State and Local Governments
  % of Gov% of GDP
Senior Subsidies22%8%
Big Three Total48%18%
Social Services11%4%
Health, NonSenior7%3%
Top Six70%26%
Highways & Transportation4%2%
Police, Courts & Prisons2%1%
Agriculture Subsidies0.6%0.2%
All Other22%9%

The biggest three government programs - senior subsidies, education, and defense - account for roughly half of all government spending.

Senior subsidies include the best loved brand in government: Social Security. Seniors also benefit from Medicare, the financial Darth Vader of tomorrow's generations; and Medicaid, a welfare program that, among other things, funds nursing home care for seniors who have depleted their savings prematurely. We have been informed that the Public Broadcasting System (PBS) too, could qualify as a seniors' program. All joking aside, senior subsidies inhaled 22% of all federal, state, and local government spending in 2009.

Education is government's stealth spender. It seldom tickles the antennae of typical taxpayers, because the dollars involved seem so small. Indeed the federal funds are relatively modest, at well under 1% of federal spending. It is all the relatively low-profile, dispersed state and local governments that are dispensing the big bucks.

Education twisted taxpayers' ears for an expected 13% of all federal, state and local tax dollars in 2009.

Defense is certainly the lightning rod of the TOP THREE spending programs. It is the issue that never goes out of fashion. While each of the TOP THREE do - and should - attract substantial debate, defense is the government business that keeps journalists employed.

Defense is anticipated to detonate 12% of all federal, state, and local government spending in 2009.

The TOP THREE together account for 48% of all government spending. How you would fund these three programs has a critical impact on your preferred government budget.

Add three more areas of expenditure and you have conquered more than 70% of the public budget.

Social services beyond the senior subsidies above, hand out an additional 11% of government spending. Here lie housing and community services, disability, unemployment, food stamps, classic welfare in the form of Temporary Aid to Needy Families (TANF), and other forms of income security.

Health, excluding the spending that overlaps Medicare and the Medicaid in senior services, received a taxpayer transfusion equal to 7% of government spending.

Interest paid on government debt is among the least controllable expenses. It deducts 5% of government's total expenses.

There are skads of other programs. Just for perspective: Highways and other transportation drive 4% of government spending; police, courts and prisons pacify 2%; farm subsidies harvest 0.6%; and space launches 0.4% of the government budget into the cosmos.