Military spend is less than 20% (combination of “Defense” and “Veterans Benefits and Services”). Some of the Vererans benefits and services are old age healthcare and defined benefit pension, so that can get subtracted from military spend and moved over to social security and Medicare (since it would happen anyway regardless of military spend).
Social security, Medicare, Medicaid m, and other healthcare subsidies are 21% + 14% + 13% = 47%.
Income security is another 9%, like food stamps, social security supplemental income, earned income tax credits, all stuff for lower income/wealth households.
So 60% of US federal government spend is welfare. Less than 20% is military. 13% is interest costs. And the remaining ~7% is for everything else.
Generally Social Security and Medicare are not considered to be welfare.
Speaking of Social Security, I did an interesting calculation. If each year starting with the year I first paid Social Security tax the government had taken that money each month and the matching amount my employer paid and put that money in a one year T-bill, and each year rolled the maturing T-bills over into new T-bills, that would have grown enough that by retirement it would be enough to pay my benefits for close to my expected remaining lifespan.
It was surprising how well it matched although I think it may be coincidence. Benefits go up if you had higher income when working and down if you had lower income, but it is not linear.
Someone with half my income would have benefits lower than me, but their benefits as a percentage of their income would be higher and so T-bills wouldn't have earned enough to cover them [1]. Similarly for someone earning twice as much as me T-bills would have earned more than needed to coverer their benefits. I apparently came in right at the spot where it balances out.
[1] Your benefit is calculated based on the average monthly income for your 35 highest income years. If your monthly average was M, and you become eligible to start collecting social security in 2025, your benefit at full retirement age is the sum of:
90% of the first $1226 of M
32% of the the amount from of M from $1226 through $7931
15% of the amount of M over $7931
For this calculation past year incomes are index for the cost of living. For example in 1986 I earned a nice round $42 000. That counts as $161 537 when doing the calculation of my monthly average.
If anyone is curious you can get the adjustment factors here [2].
I would contend it is welfare since the quality and quantity of the benefits constantly decreasing (due to population histogram flattening out). Benefits received are less and less correlated with what you put in.
Defined benefits need to be reduced, via changes such as raising retirement age, changing the bend point in the benefit formula, and changing the inflation measure.
Also, that left hand right hand change of funds from social security trust fund to US treasuries is not meaningful. At the end of the day, if the government is not collecting enough tax revenue to offset the spend, it is resulting in decreased purchasing power of the currency (which is a form of welfare in my eyes from young workers older non workers).
For Medicare, you have things like having to see a PA/NP rather than an MD, or having to wait longer times for appointments. And people generally get far more healthcare than the accumulated value of their FICA contributions.
It is, mathematically, today’s young workers paying for old people’s healthcare. And they should bet on getting less.
Fed children that don't suffer from easily treatable diseases contribute back more than the cost. Blanket actions like this are very poorly thought out even under that kind of cold ROI perspective.
It is obvious to anyone that well raised children provide a huge ROI...but not to a large portion of voters due to the shape of the population histogram. Instead, countries are spending tons and tons of resources on 80+ year olds' dialysis, heart bypasses, hip replacements diabetes management, and end of life care. And keeping their property taxes low even though they live in large houses on large lots. Cold or hot, there is obviously no ROI there.
You are right. I never suspected this would be the case.
Still, social/income security and healthcare (and education) should be the last places one should cut budgets.
Also, the US spends more in their military as a percentage of their GDP than any other developed nation. This sounds like an excellent place to cut. The US government subsidizes a lot of weapons research as well, for companies that'll later sell the tech the government helped them develop to foreign countries at a profit. I don't think it's fair to subsidize a private enterprise this way.
The largest amount of the money is in the unfunded liabilities for social security and healthcare over the next 50 years. It is hard to even know what it is, 60, 70, 80 trillion?
Younger people will end up both paying for this while getting old from higher interest rates and inflation and then when actually old? The money has all been spent. Sorry, no services.
If you think the price of things are bad now try some fiscal dominance and debt monetization. I suspect it is already too late to avoid fiscal dominance. At 50, maybe I won't see it though. At 20? A 20 year old probably has a good chance of fiscal dominance, debit monetization and maybe even USD losing reserve currency status.
