Massive federal deficits, not enough money for social programs. Where have all our tax dollars gone?
The charts below (click for full page versions) show how our income tax dollars were spent in FY2007, which ended last September 30 (data from Budget of the United States Government: Historical Tables Fiscal Year 2009, Table 8.7). As you can see, 52.7% of these discretionary funds went to the military.


More over the fold about military spending, federal deficits, and real security...
These charts exclude expenditures for Social Security, Medicare, and federal highways since these programs are paid from dedicated taxes maintained in separate trust funds. They also exclude interest paid on the national debt since that spending is "mandatory", not "discretionary". These charts show the part of the federal budget that Congress and the President directly allocate each year (with the funds derived from our income taxes, corporation taxes, excise taxes, estate and gift taxes, and other miscellaneous taxes).
US Military Spending in the Past 70 Years
In the current year (FY2008), military spending is estimated to be $604 billion (data from Table 8.7) -- an unprecedented expenditure. This represents an average of about $5,300 from each of the 114 million households in the US. Military spending in inflation-adjusted dollars is now 58% greater than in FY2000. It is greater than at any time during the Cold War and even greater than during the peak spending years of the Vietnam War, the Korean War, and the Persian Gulf War (see the chart below -- data from Table 6.1).

For FY2009, President Bush's proposed budget allocates an enormous $671 billion to the Pentagon (data from Table 8.7), an 11% increase over FY2008 -- and this doesn't even count the additional money he will probably request later for the continuing wars in Iraq and Afghanistan.
Running Up a Deficit
All this spending on the military has resulted in massive deficits. The chart below clearly shows that during each period of military build-up and war, the deficit has swelled. In contrast, the federal government had budget surpluses in the periods of relative peace after World War II, after the Korean War, and after the Cold War, Reagan Build-up, and Persian Gulf War had each ended.

(data from Table 1.3)
Is It Needed?
The United State now has the most powerful military that has ever existed in the history of the world. US nuclear weapons could destroy the planet and make it uninhabitable by humans. US conventional military force is mighty enough to wage two wars simultaneously far from our shores. The US has over 800 military bases around the world and 11 aircraft carrier battle groups circling the planet (and no hostile country has more than 1). The US spends almost as much on the military as all the rest of the world combined. In 2009, the US plans to spend vastly more on its military than any possible enemies: 6 times as much as China, 10 times as much as Russia, 99 times as much as Iran, and almost 55 times as much as the combined spending of the six "rogue" states (Cuba, Iran, Libya, North Korea, Sudan, and Syria). The US and its strongest allies (the NATO countries, Japan, South Korea, and Australia) will spend $1.1 trillion on their militaries combined, representing 72% of the world’s total.
Despite this massive amount of spending on the military, people in the US are still afraid and feel that our military is not adequate. They want to increase the military budget. The pro-military propaganda has been so extensive for the last 70 years that our country can no longer think clearly about security.
We should have learned from Eisenhower's farewell speech in 1961 to be wary of the military-industrial complex. We should have learned from the 9/11 terrorist attacks that 19 guys (mostly from Saudi Arabia, an ally) armed with box cutters can attack the United States more effectively than massive armies. We should have learned that huge expenditures on military personnel and weapons (especially on weapons designed for use in the Cold War) are ineffective in protecting us. And we should have learned -- as all the US intelligence agencies have warned us -- that the Iraq war has made us less safe. Still, Americans believe that a larger military force provides us with greater security.
Real Security
The best security is provided by not having enemies, and the best way to achieve this is to treat other countries and their people well. Invading and occupying other countries, supporting dictators, and torturing people who disagree with us are great ways to make lots of long-lasting enemies. In the past 110 years, the United States has used military force in dozens of places around the world to gain access to natural resources, secure cheap labor, stifle dissent, and crush the efforts of opposition political movements. For example, the United States has obstructed independence movements in Cuba, Puerto Rico, the Philippines, and Nicaragua. It has staged covert actions to overthrow democratically-elected governments in Iran, Guatemala, and Chile. And it has invaded the Dominican Republic, Grenada, Panama, Afghanistan, and Iraq. Moreover, the US has supported and helped to arm dozens of dictators including the Shah of Iran (Shah Mohammed Reza Pahlevi), P.W. Botha in apartheid South Africa, Augusto Pinochet in Chile, General Suharto in Indonesia, Francois "Doc" Duvalier and Jean Claude Duvalier (Baby Doc) in Haiti, George Papadopoulos in Greece, Anastasio Somoza, Jr. in Nicaragua, King Fahd bin Abdul of Saudi Arabia, and General Pervez Musharraf in Pakistan.
The second best way to provide security is to have large numbers of strong allies around the world and to build trust by negotiating treaties and then adhering to them. Repudiating treaties like the Anti-Ballistic Missile (ABM) Treaty, ignoring important initiatives like the Kyoto Treaty and follow-on efforts, and launching crazy, unilateral military adventures based on lies (ike the Iraq war) are great ways to lose friends and allies.
The third best way to provide security is to build strong domestic support. Spending all our money on the military instead of on important domestic needs is a great way to impoverish our country and undercut domestic support.
But What About Toppling Repressive Regimes?
Don't we need a strong military to save people from oppressive and genocidal regimes? Actually, the most effective and most ethical means to overthrow vicious dictators and undermine horribly repressive regimes is nonviolent action carried out by civic groups within those countries. For example, in the last three decades, nonviolent action has toppled the apartheid regime in South Africa, deposed the dictatorships of Slobodan Milosevich in Yugoslavia, Ferdinand Marcos in the Philippines, and Augusto Pinochet in Chile, and brought down the former Soviet Union and its communist satellite states (including Poland, East Germany, Czechoslovakia, and Lithuania). Overthrowing those regimes incurred relatively few casualties and wrought relatively little destruction. The nonviolent overthrow of these regimes has mostly left these countries stronger, more civilized, and much more free and democratic.
A 2005 study by Freedom House (2.3 MB pdf) found that in the 67 cases since 1972 in which dictatorial systems fell or new states arose from the disintegration of multinational states, "civic resistance was a key factor in driving 50 of 67 transitions" -- over 70%. In 32 of the 67 countries (nearly 48%), "strong, broad-based nonviolent popular fronts or civic coalitions were highly active, and in many cases central to steering the process of change... Now, years after the transition, 24 of the countries (75 percent) where a strong nonviolent civic movement was present are Free and democratic states and 8 (25 percent) are Partly Free states with some space for civic and political life." In contrast, only one transition to freedom (Panama, 1989) was brought about by an outside military force. They also found that "the stronger and more cohesive the nonviolent civic coalition operating in societies in the years immediately preceding the transition, the deeper the transformation in the direction of freedom and democracy."
Conclusion
Spending on military force, in inflation-adjusted dollars, has grown to a level about 23 times as high as it was in 1940. Much of these expenditures have been used, not to protect our citizens from harm, but to invade and occupy other countries, support dictatorships, topple democratically-elected governments, and otherwise secure our "national interests" by controlling the rest of the world. In reality, this has undermined our security and bankrupted our country. We could drastically reduce our military budget by focusing strictly on defense of our territory, which would could probably be easily accomplished with $50-100 billion/year. Then we could devote more resources to efforts that would actually make us safer: collaborate with our allies, negotiate with our opponents, provide support to international bodies like the United Nations and the World Court, build up our own economy, protect the environment, provide aid to impoverished countries, provide support to civic movements that use nonviolent action to challenge and undermine repressive regimes, and support human rights throughout the world.
Some other resources:
CPC Budget
Representative Barbara Lee video on the Congressional Progressive Caucus Budget for FY2009 (7 minutes)
Vote on the Congressional Progressive Caucus' Budget for FY2009
Budget Commentary
War Resisters League (WRL) budget pie chart
Friends Committee on National Legislation (FCNL) commentary on the federal budget
Center on Budget and Policy Priorities (CBPP) commentary on the federal budget
"The Chaos in America’s Vast Security Budget" by Winslow T. Wheeler, Center for Defense Information (CDI), February 4, 2008.
Other Alternatives
National Priorities Project's alternative uses of military money
Cartoon video by True Majority's Ben Cohen (of Ben & Jerry's Ice Cream) on a Common Sense budget (2005) (3 minutes)
National Campaign for a Peace Tax Fund