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View Diary: Social Security: whose piggy bank is it? (75 comments)

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  •  Federal Budget $2.3 Trillion (1+ / 0-)
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    simple serf

    MarshWiggle has a good question in asking how much the federal budget is without Social Security. In the 2011 budget, without Social Security and Medicare spending not covered by payroll taxes, was about $2.3 trillion and defense was definitely the largest amount.

    In addition to the $699 billion shown, there were other expenditures for national security, including probably $100 billion or so for ongoing operations in Afghanistan and other places, the Dept of "Homeland" Security, and the Dept of Energy (which actually houses the nukes, not the Dept of Defense--despite Rick Perry's profession that he'd get rid of it).

    The figure above for Medicare is also higher than it should be. The total spending for Medicare in 2011 was about $480 billion, but about $188 billion of that came from payroll taxes. One reason Medicare has a much lower revenue stream is because it has not kept pace with enormous increases in healthcare costs.

    By my calculations about half of the actual federal budget is related in one way or another to national defense.

    I didn't include in my calculations interest paid to the Social Security fund, which would make the total federal budget perhaps a bit lower.

    The primary reason both Social Security and Medicare are not entirely funded by payroll taxes is because wages and jobs have not kept pace. Since we started shipping jobs overseas wages have fallen and the share of business income going to them has dropped from 60% in 1980 to 50%. The depressed funding for these programs reflects the degree to which workers have suffered economic decline since the 1970s.

    What's important about this is that Republicans are constantly claiming enormous "government spending". Social Security and Medicare are not government spending. These programs require employers to pay the natural cost of their labor. By increasing the per-hour costs they make sure employers pay workers what they need to survive not just while they are working but while they can't work. The money is not converted to government money, but rather flows from one group of consumers to the same group (after retirement).

    We need to strike back at Republicans and remind them that their numbers on "government spending" are off by over a trillion dollars a year. Even in Washington, that's a fair amount.

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