A lot of people’s eyes glaze over when they hear about a “budget”—whether
it’s for a business, a club, or the government of the United States.
Yet the government has enormous influence on our lives because of the
way it collects our money and spends it for various purposes. Its spending
priorities are reflected in its budget.
Unless you understand roughly what the budget includes, your opinions
may be completely irrelevant. For example, according to an
excellent survey by the Program on International Policy Attitudes
(PIPA), a majority of Americans believe that the US spends too much
money on foreign aid. They estimate that 20 percent of the federal budget
goes to foreign aid; they would reduce this amount to 5 percent. In
fact, the federal government devotes less than 1 percent of its budget
to foreign, nonmilitary aid. Anyone who calls for aid to be cut to 5
percent has an irrelevant opinion, because he or she doesn’t understand
what the government does.
Here, then, is how the federal government spent an average
tax dollar during the years 1998-2004 (2003-4 are estimated).
The data come from this
OMB document, but I have made decisions about what programs to put
in each category. The federal government is responsible for about two-thirds
of all taxation, although it gives some of its funds to states. States
and local governments together raise about one third of all taxes. (Source:
OMB.)
The "all other" slice in the chart above is distributed as
follows:
Here is how an average state tax dollar is spent. Data from National
Association of State Budget Officers, State Expenditure Report, 2001
(Summer, 2002).
And this is an average county budget from 1996-7, based on the US Census
Bureau’s survey of county officials