The 2016 Budget: They've Gone About as Far as They Can Go

Budget Day, February 2, 2015, was a busy day for me, as I downloaded the budget data from the Historical Tables and then uploaded the data to But I found the media atmospherics about free community college and taxes on the rich curiously disorienting. That's because exists in a different reality. It doesn't deal in the marginal changes in political shape-shifting; it resolutely looks at the whole picture. And the reality is that the federal budget has gone about as far as it can go. The only question is: what comes next? Let's look at overall federal spending, expressed in percent of GDP, to give you a feeling of how big the federal government's weight is relative to the rest of the economy. The chart shows the four big programs: pensions including Social Security, health care including Medicare and Medicaid, welfare, and defense, including veterans and the State Department. It used to be that defense (in...(Read Full Article)