Find Out How Your State Spends Your Tax Dollars

I live in Massachusetts, affectionately called taxachusetts by those who live here. It seems like we are constantly getting hit with a higher tax somewhere. But recent web browsing brought me to an site that had a counter on the bottom of it. It was moving quite fast and after further inspection, I found it was counting the amount of money that we (The United States) had spent on the war in Iraq. So, I clicked through and ended up somewhere I didn’t expect. Frankly, I thought I would end up on a politically charged website that did nothing but bash me over the head with propaganda. But that was not what I got.

After reviewing a few links on the site nationalpriorities.org, I got to this simple, but interesting distribution of federal tax for massachusetts pdf. And I thought that it was very interesting. Not really so much from a war-in-iraq point of view. Sure, there is that angle, but the other trends that this data is showing are important also. So, I would like to bring up two points that I am noticing which are somewhat troubling:

1. The government is spending more than it used to. That is, the ratio of pennies paid per dollar on actual expenses rather than debt is much higher now than it was in 2000.

2. Lack of debt repayment has implications for inflation.

Digesting The Facts

I will deal with each point separately. First, the fact that more is being spent on real goods and services as opposed to debt, is obvious from the graphics. When I define more, I don’t mean more in terms of total tax dollars, but rather as a percentage of the tax dollars spent in total. This is the same as someone who is spending much more on new gift purchases rather than paying down credit cards during the holiday shopping season. But in this case, it is a trend, not a one-month phenomenon. And the numbers are much bigger. This is the government after all.

This implies that more is needed now than before. Clearly before 2001, we did not have the Iraq war, the war in Afghanistan, the decimation of Katrina or Rita, or numerous other items that could be mentioned. However, we as a country did not “tighten” the belt, we just spent more and ran up the country’s “credit line” to generate a high amount of debt to be included in our deficit.

Why Our National Debt is Bad

A large deficit is likely to be a problem becuase the amount of interest that needs to be paid on that debt is significant. For those of you bloggers who are working to payoff debt, understanding the pain of the debt of an entire country is fairly simple to understand. It is wasted money. Period. Responsibly, as adults we want to work toward a point where we don’t spend money we don’t have. Our government should be doing the same, shouldn’t it?

Eventually, the expense of the war and the hurricanes will be gone. And the causes will only be a faint memory, but the debt that is incurred as a result will be the gift that keeps on giving. In fact, as population dwindles and more jobs are lost overseas or our economoy equalizes with that of the rest of the world, it is likely that we will be earning less as a country and will be less able to pay off that debt. But, that does not stop us, we continue to spend.

Spending Money is Fun

I really like spending money, actually. It is a lot of fun. And we have some real needs not just in our country, but in the world that we should meet. The challenge is figuring out how to meet those needs and fulfill our obligations without becoming a poor nation. Securing the debt of our war and our deficit, there are devices from the treasury called t-bills and the like. These are items that are backed by the U.S. government. If the debt cannot be paid, taxes will be raised. However, if taxes are raised or the money supply is increased by printing more money, inflation can start to rear its ugly head.

Where Do We Go From Here?

Slowing down and reversing our national debt should become a priority, for all of us, otherwise programs like medicare and social security are in even more danger than we thought before. Rising costs of healthcare and decreased population and less high-paying jobs are just the reasons you know about. What about the one you don’t know about? Interest. Now, in addition to the existing issues, we will have other nations anxious to take a huge percentage of our tax dollars in interest alone for our country’s debt.