Department of Awful Statistics: How Much of the Government's Revenue Goes to a Few Programs?
I was intrigued by this line in the Washington Post story on the budget commission:
"Bowles said that unlike the current economic crisis, which was largely unforeseen before it hit in fall 2008, the coming fiscal calamity is staring the country in the face. "This one is as clear as a bell," he said. "This debt is like a cancer."The commission leaders said that, at present, federal revenue is fully consumed by three programs: Social Security, Medicare and Medicaid. "The rest of the federal government, including fighting two wars, homeland security, education, art, culture, you name it, veterans -- the whole rest of the discretionary budget is being financed by China and other countries," Simpson said.
I am intrigued because as far as I know, it isn't true. It isn't true according to the CBO's YTD revenue estimates, which place revenues at around $1.5 trillion and outlays on those programs at about $850 billion. It also isn't true according to their annual estimates, where those three programs absorb about 10.5% of GDP, while revenues are around 15% of GDP. Even in these deficit-laden times, it isn't even sort-of true; at best, they're off by a third. It might be true for some given month, for all I know, but that would only be because taxes tend to come in unevenly (big spikes on April 15th, as well as the three periods when Quarterly Estimateds are due), and some spending is also done in fits and spurts. It's a transient effect which shouldn't interest anyone except the Treasury's debt planners.
Eventually, it will be true, but not any time soon. I don't know who got this mangled, the reporter or the heads of the budget commission. But I sure hope it's the former, because if it's the latter . . . well, we're in even bigger trouble than I thought.