I remember the first time my brother got his paycheck.  His reaction was horrified shock, then quickly followed by the question; “Where did my money go?”   All I could say was “Welcome to the real world.”   That was his unpleasant introduction to payroll taxes.

Unfortunately for my brother, his share of the tax burden will only get worse as he gets older.  Our tax system is a progressive tax system.  This means that you actually get penalized for making more money.   It’s not something that we can change anytime soon.   The best that we can do is ask for accountability of how our tax money is spent.

Our government has spent a lot of money recently.   Much of it was classified as “emergency spending” and was unaccounted for in the budget.   Since we’re looking at higher taxes coming up in 2011 and beyond, I thought it would be fun to look at a breakdown of the federal government’s discretionary budget.

Jesse Bachman, a freelance graphic designer, spends two months every year to research and create the 6 feet poster seen below.  It shows visually where our tax money is spent.  He sells the posters to support the project.   If you are interested in buying the posters for a school, he discounts it down to $5/poster.  The chart shows the breakdown for the discretionary (optional) budget that the President has proposed.   The full budget, including the requirement for entitlement programs, is in a tiny section at the bottom right of the chart below.

You can click on the chart to open up a larger picture and zoom in on each section.

Here are a few items that jumped out at me.

It’s interesting to see federal spending on interest expense for the national debt has increased a whooping 34%.  Hmm.  What kind of financial advice would you give someone who keeps spending money they don’t have?

As a country, we’re also very philanthropic.   For 2011, the country will spend $1.5 Trillion on basic entitlement programs, of which $297 Billion is for Medicaid.  This is before the new Health Care law goes into effect.

I believe strongly in education but am baffled by the following budget line-items.   Did you know that we spend almost $4 Billion on something called Excellent Educational Teams?   I have no idea what that is.   Then there’s Supporting Student Success which receives almost $2 Billion, and a program called Race to the Top that has $1.350 Billion earmarked for it.   Another program, Effective Teaching, has over $1 Billion allocated.  Could someone explain the purpose of these programs?

Wondering what we really spend on those foreign wars?  So was I, but costs are spread out over too many different departments.

While looking around, I ran into what we spend on foreign aid.  Did you know that we have separate allocations for two specific foreign countries?  Egypt ($1.3 Billion) and Israel ($2.8 Billion).   They each get their own line item.

Then there’s the Economic Support Fund at $7.8 Billion–not sure what that is for.

My takeaway from this onslaught of data is that someone will have to pay for all this spending.   Hopefully, my brother stays employed and helps to shoulder the burden.  Otherwise, I won’t be able to retire.

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