We beg your indulgence, dear reader, for this weekend departure from the usual contents of our blog. We try not to do this very often, but news of The Controversy between evolution and creationism is scarce at the moment. We focus on that as part of our larger concern for preserving the philosophical and political principals of the Enlightenment, upon which our civilization depends, so this isn’t too far off-topic for us. We can’t forget that if we lose our freedom, there isn’t much else that matters.
Analyzing the federal budget isn’t a job for amateurs, so we’ll approach the subject in the most general way, looking for concepts and trends, not green-eye-shade details. We’ve chosen to compare two budgets that are 40 years apart — 1970 and 2010. Forty years is a nice, scriptural number, evocative of wandering in the wilderness.
The trends we’re discussing here started before 1970, and they continue after 2010, but those two years are convenient milestones for our purposes. It wouldn’t be fair to go back another ten years and use 1960 as our beginning, because the government was totally different back then. We weren’t yet involved in the Vietnam war, although the Cold War with the Soviet empire was certainly in full flower. The federal budget in 1960 was almost unrecognizable by today’s standards. Other then expenditures for general government, national defense, and foreign aid, there wasn’t much else except for Social Security. There were other “social” expenditures for health, education and welfare, but those were minor compared to today. It was a good year, but not for our purposes today.
All of our budget figures come from this official US government source. There are zillions of tables there. In order to view the big picture, we’re using their Table 3.1 — Outlays by Superfunction and Function. We’re assuming that the category descriptions are roughly comparable from year to year.
We’re not adjusting the old budget figures for inflation, because the tale we’re telling is revealed in the percentages, not dollar amounts. You can make adjustments for inflation if you like. Using the Bureau of Labor Statistics Inflation Calculator, what you could buy for $1.00 in 1960 would cost $1.31 in 1970 and $2.78 in 1980 — and $7.37 in 2010. Yes, our currency is as sound as the dollar.
The figures for 1960 (the year we’re not using) start at page 49, and for a flash of quaint nostalgia, the figures are presented in millions of dollars — not billions. In 1960 the entire budget was $92,19M — that’s right, less than $100 billion. National defense was $48,130M, which was 52.2% of the whole budget, and 9.3% of Gross Domestic Product (GDP). Cold War, remember? Human resources cost $26,18M, or 28.% of federal outlays, and 5.1% of GDP. Interest on the national debt cost $6,947M, 7.5% of the budget, and 1.3% of GDP.
The radically different budget in 1960 (by today’s standards) helps to emphasize the long-term trend, but we’ll stick with 1970 for our starting point. That year is more like today’s in budgetary terms, and it gives us poetic license to speak of 40 wilderness years. It’s useful, however, to bear in mind that the farther back we go, the more obvious the trend appears.
In 1970, like now, we were at war. It was a year after we first landed a man on the moon. The medicare program had already been established (started in 1965), and that was only part of Johnson’s “Great Society” program (which also included his “War on Poverty”), so we had a fair amount of social spending in the budget. Inflation, which raged through the subsequent Carter years, was getting started — the result of Johnson’s “Guns and Butter” method of financing both the war and the Great Society by printing money instead of raising taxes (or — gasp! — cutting non-defense spending).
The 1970 budget figures are on page 50 of the link we gave you. “Human resources” includes Social Security, medical & other health programs, as well as education, income security (welfare), and veterans benefits. These are the original (not inflation-adjusted) figures, and to keep it simple we’re leaving out “Physical Resources” (energy, transportation, etc.) and Other Functions (international affairs, agriculture, general government, etc.)
For 1970 the federal budget was $195,649M (more than double what it was in 1960).
• Defense was $81,692M, 41.8% of the entire budget, and 8.1% of GDP.
• Human resources was $75,349M, 38.5% of the entire budget (up from 28% in 1960), and 7.4% of GDP (up from 5.1% in 1960).
• Interest on the debt was $14,380M, 7.4% of the entire budget, and 1.4% of GDP (roughly the same percentages as in 1960).
Now let’s look at the figures from 2010, forty years later, found on page 55:
The federal budget was $3,091,340M (yes, that’s three trillion)
• Defense was $590,357M, 19.1% of the entire budget (way down from 41.8% in 1970, because other parts of the budget were way up), and 3.7% of GDP.
• Human resources was $2,023,583M (two trillion), 65.5% of the entire budget, (it was 38.5% in 1970) and 12.8% of GDP (it was 7.4% in 1970).
• Interest on the debt was $279,982M, 9.1% of the entire budget (up from 7.4% in 1970), and 1.8% of GDP (up from 1.4%).
What about the national debt? Those figures (in millions) for the end of each fiscal year are at page 127:
• For 1970: $380,921M, which was 28.0% of GDP
• For 2010: $10,954,389M (ten trillion), which was 69.4% of GDP. In forty years, although the economy was growing, the debt climbed from less than 30% of GDP to almost 70%.
And that debt figure doesn’t tell anything close to the whole story. It’s just treasury borrowings. It doesn’t include commitments that have been made and that will need to be honored.
So class, what do we learn? We’ll leave that for the comments.
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