The 6% Problem

Its wonderful to live in a free and open society. No country in the history of the world provides more open access to government than does the United States.

The Congressional Budget Office (CBO) was created in 1974 to provide cost estimates for:

Objective, nonpartisan, and timely analyses to aid in economic and budgetary decisions

Its job is to tell Congress just how much Congress’s decisions will cost or save U.S. taxpayers… the people footing the bills.

Most major spending bills these days have CBO cost estimates attached that any American taxpayer can review online at the Library of Congress through

Those cost estimates are usually available for viewing online within 48 hours.

The 6% Problem

The CBO provides an information screen it dourly titles “Budget and Economic Information

But there it was until today… standing out like a sore thumb for all to see… the 6% problem shown above!

CBO’s simple graphic on that screen boils all government spending down into just 4 categories:

  • Mandatory Spending (55%)
  • Defense Discretionary (20%)
  • Nondefense Discretionary (19%)
  • Interest (6%)

That last little item is the amount paid out of 2010’s total federal budget just for interest on the national debt. In 2010 that amount was $414 billion.

You could fund a whole lotta programs for $414 billion.

For example, President Obama requested $18.7 billion to fund NASA in 2010. We could have funded 22 NASA programs for the cost of the interest alone on the national debt!

Non-Interest Spending Categories

A word or two about the other three CBO spending categories…

“Mandatory spending” covers all manner of social programs… Social Security, Medicare, Medicaid among many others. At 55%, it takes up the bulk of government spending.

At 20%, “defense discretionary” covers… welll… defense. At 19%, “nondefense discretionary” spending covers everything else… like the Department of Education, Department of Commerce, the EPA, etc.

For example, NASA’s budget is part of the 19% in “nondefense discretionary” spending.


In 2011, according to U.S. Treasury data released this month, the federal government spent $454 billion on interest payments on the national debt. That is nearly a 9% increase over 2010 and now up to 24 NASA programs.

The federal government borrows $3-$4 billion EVERY DAY to meet its current expenses. Right now the federal government borrows approximately 39 cents of every dollar it spends.

About 90% of all that borrowing is from outside investors and foreign governments like China, Japan and the United Kingdom.

The interest payment on the national debt will never go down until this nation starts paying down its national debt. That won’t be possible for decades.

The federal government won’t even have it’s yearly deficit under control for a decade or more!

And that will only be possible if we impose serious austerity measures and raise taxes, something Congress and the President are unwilling to do. Only after that can we tackle reducing the interest cost on the national debt.

The only certainty is this…
If the United States continues on its current path we will be paying more and more for less and less and the balance will be eaten up by the mushrooming growth of interest payments on the national debt.


About azleader

Learning to see life more clearly... one image at a time!

Posted on Jan 13, 2012, in 2012 Elections, Debt, Deficit, economics, Economy, National Debt, news, Politics, Taxes, U.S. Economy. Bookmark the permalink. Leave a comment.

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