Dividing the Dollar: An Analysis of Government Expenditure
Written by Ryon Jemail
One popular refrain among the American public, media, and even Capitol Hill is that the United States spends far too much money outside its borders, sending it to allies abroad while neglecting issues at home. While this sentiment may have a grain of truth to it, it’s not the entire story. In a study conducted by PBS News Hour last year, almost half of America thinks we are spending too much on foreign aid and not enough domestically. This begs the question: what exactly is the story?
Contextual Analysis of Government Spending
First, it’s important to understand the facts about our foreign aid expenditures. In dollars, U.S. foreign aid obligations jumped from $56.3 billion in 2021 to $70.4 billion in 2022, the latest year for which final data is available from a federal tracker. That seems like quite a hefty amount of money, but it's important to add some context: that 70.4 billion dollars is, in fact, only 1% of total government spending. This makes the fact that “Opinion polls consistently report that Americans believe foreign aid is in the range of 25 percent of the federal budget” even more concerning - after all, if the vast majority of our budget is spent domestically, yet people feel as if it's not enough, something is off.
Domestic Budgeting
The Center on Budget and Policy Priorities breaks it down for us even further: 21% is spent on Social Security, 24% on health insurance, and another 13% on national defense. The remaining major cash is funneled into economic programs and welfare at 8%, veteran benefits at 8%, and interest payment on our national debt at 10%. The remaining 16% goes toward infrastructure, the justice system, and other essential services.
But yet again, a Fortune article details that in polls and surveys, the majority of Americans want an increase in health care and social security spending, but simultaneously think the government spends too much money. This political disconnect relies on the economic concept that ties rates of inflation to interest rates. When the government increases subsidies, prices artificially increase thus skewing the image of national expenditure.
Concluding Thoughts
Is this just a case of an uninformed citizenry, or a symptom of a larger concern? That question lingers, but here’s the fact: foreign aid expenditure pales in comparison to domestic spending. On top of that, domestic spending is largely geared towards services that directly benefit the citizenry, despite the many who think it’s not enough. It seems that no matter how much information Americans have access to, the finances of the government will continue to be a mystery.
Ryon Jemail is a student interested in the intersection of finance with political science from Palm Beach County. Outside of his efforts in journalism, you can catch him competing in debate tournaments on the weekends.
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