The Economist’s U.S. editor Greg Ip directs us to this comprehensive slideshow from CBO director Doug Elmendorf on the state of the federal budget.
It jibes nicely with a presentation we published earlier Friday from the BEA on misconceptions about the economy.
Elmendorf breaks down federal spending’s sources and destinations, then discusses different paths the budget could take depending on whether House Republicans or Senate Democrats get their way.
Although he emphasises the CBO does not advise on policy, he repeatedly stresses the dangers of failing to get a handle on our growing debt.
Discretionary spending is one of the smaller parts of the budget, compared with things like Medicare and social security.
Among other mandatory spending (so not social security or Medicare), the largest share goes to low-income households.
Discretionary spending. Within defence spending, operations spending is nearly double what personnel receive.
There are several ways to evaluate policy through the lens of debt: how fast will it be reduced, and by how much?
There are other considerations, like how it would affect the economy, and how it would affect future policy changes.
Democrats also have a 2023 target to reduce — though not balance — the deficit, except they would change spending and taxes.
In conclusion, under current law medicare and social security spending will be up, defence spending will be down and debt will be huge.
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