You may be asking: “Are you sure you’ve got those pie charts labeled correctly?” You can see at the top of this story two charts, one depicting federal spending in 1954, the other one showing federal outlays last year. With wars raging in Afghanistan and Iraq, and on terrorists elsewhere around the globe, the taxpayer last year spent an astonishing amount of money on the military: about $500 billion. The budget proposal that President Bush unveils Monday won’t ultimately change the size of the slices in that budget pie chart very much. Spending on the military accounted for 19 cents of every dollar of federal expenditures in 2006. That might seem like a lot, until you consider the Cold War year of 1954. That year marked the post-World War II peak of military spending, measured as a percentage of total federal outlays. Nearly 70 percent of all federal expenditures in 1954 went to buy rockets, rifles, radar, and nuclear warheads and to pay the salaries of Americans in uniform. If you measure it another way, military spending in 1954 accounted for 13 percent of the total U.S. economic output (gross domestic product, or GDP). Today it accounts for about four percent of GDP, a decline of 70 percent since 1954.
I was wondering when he’d get away from comparing nominal figures over a half century apart to looking at percentages of GDP. But he needs to check again – defense spending is closer to 5% of GDP than 4% of GDP. Now that’s a lot less than 13% but then we aren’t fighting the Cold War anymore.
Curry then goes onto talk about how expensive Social Security and Medicare/Medicaid are and ends his op-ed with:
Bernanke said unless the entitlement programs are redesigned, federal debt will grow to a point where it “would spark a fiscal crisis, which could be addressed only by very sharp spending cuts or tax increases, or both.” Senate Budget Committee chairman Sen. Kent Conrad, D-N.D., is also sounding the alarm. “We’re heading for a circumstance in which all of federal spending will be consumed just by Medicare and Medicaid and Social Security,” Conrad said Thursday. “There’d be nothing left for national parks, for highways, etc. That’s the outlook in the long term, if we fail to act. The conclusion one reaches is that we’re on a completely unsustainable course.” Such a dismal scenario might make one nostalgic for 1954.
It would have been nice to also tell his readers that payroll taxes have been much higher since 1983 than they were in 1954. Since Mr. Curry failed to, we did in our graph.