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« On the Grand Strand | Main | Women's work »

Apr 14, 2008

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Anthony

Somewhat related: Just finished watching Maxed Out. According to the film, the U.S. spends more money on just the interest portion of our national debt than we do on homeland security, education, and healthcare combined.

Stormy

Anthony,

Your comment is misleading to inaccurate. First, education is not a province of the U.S. Government, it belongs to the states. Even so, the Fed 2008 budget for education is $56 Billion, and it is arguable that money should not even be part of the federal budget. Homeland Security 2008 budget is $34.3 Billion. You could consider the money budgeted for Medicaid and SCHIP as healthcare, and the budget in 2008 is $209 Billion. Those three items total $299.3 Billion. The 2008 budget for Interest of National Debt is $261 Billion, not an insignificant amount. So, those three items exceed Interest of National Debt by $38.3 Billion. The 2008 Federal budget stands at $2.9 Trillion.

Interest on National Debt is part of what is called Mandatory Spending and is budgeted in 2008 at $1.788 Trillion with Discretionary Spending at $1.114 Trillion. Mandatory Spending could be considered fixed cost spending. What makes up that Mandatory Spending?

* $608 billion (+4.5%) - Social Security
* $386 billion (+5.2%) - Medicare
* $209 billion (+5.6%) - Medicaid and SCHIP
* $324 billion (+1.8%) - Unemployment/Welfare
* $261 billion (+9.2%) - Interest on National Debt

Did Maxed Out explore the fact that much of our national financial problem is due to social spending, which Hillary and Obama want to greatly expand with national healthcare? Interest on National Debt is a problem without a doubt, but it pales in comparison with our country's payment obligations to its citizens in Social Security, Medicare, Medicare/SCHIP, and Unemployment/Welfare.

Anthony

Hi Stormy,

Whether or not education is "a province of the U.S. Government" doesn't really matter - the fact is our federal government *does* spend money on education. That some people think it shouldn't doesn't affect the comparison of the numbers. Some of us don't think we should be spending money servicing interest on a huge national debt either, so I guess it all evens out.

Regarding the actual numbers - whatever the budget may say, according to the Treasury website, our actual interest expense on the debt for this fiscal year was already $221 billion as of March, and that's with 6 months left to go. Last year, we spent $429 billion. In 2006 - the year Maxed Out was released - we spent $405 billion. So it doesn't sound like their numbers are inaccurate.

As for the subject matter covered by Maxed Out, the federal debt stuff was actually just a very minor point - I only mention it because I'd just finished watching it and it related to this post. The main subject of the film was actually consumer debt - the fact that large segments of our population are living beyond their means and going deep into credit card debt and buying houses they can't afford. Come to think of it, that would seem to relate to several other posts on this site...

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