Sunday, February 05, 2006

Order Code RL33228
Federal Spending by Agency and
Budget Function, FY2001-FY2005

As shares of the economy, total federal outlays were 20.2% of GDP in 2005.
The largest budget function, Social Security, was 4.3% of GDP.

the six largest functions accounted for most of federal spending as
a share of GDP by a substantial amount. The largest six combined were 17.1% of
GDP in 2005; the remaining 12 functions with positive outlays made up 3.6% of
GDP in that year.

The CRS Report gives a good overview of the Economy in a relatively straightforward account. It also provides some understanding that 'Business as Usual' cannot be continued, with Federal Spending less than $1 trillion in 1985 and over $2.2 trillion Today. The real Culprits are Social Security, Defense, and Interest on the Debt. Each are overblown, and We need to consider structural changes.

The long-term method to eliminate the Interest is to equitably raise Taxes. Repayment of the National Debt based on a rational schedule would not be difficult, or an injury to the Economy, despite the protest of Economists. It would entail discrimination against foreign Goods--at Odds with current Free Trade policy--and cancellation of Tax favoratism; the true Favorite of only Politicians trying to gain political support.

Parity in Defense forces with foreign military establishments could cut the Defense bill to One-Third of its current Cost, with no relative increase of national Risk; though it raises the Risk factor for deployed Troops, and Generals would again have to relearn the strategic and tactical basics of warfare. The real opposition here comes from the Military/Industrial complex and its employed Lobbying establishment. They would really miss their artificially enlarged Corporate profits.

Social Security Costs (specifically Medicare and Medicaid) could be cut by major degree in switch to General Accounting principles. Patient Care would be paid for by the Instance or Day (think of Doctor Visit, or hospitalized Day). Medical Charges find payment on the basis of Volume, not specific activity. Doctors, Clinics, and Hospitals would charge at personal Profit rates, but only in general--not by specific service. They would be granted a financial reward, but one based on genuine Patient Care, not hidden Profits on specific services. Specialization would still occur, but based on Patient Visit or Hospitalized Day. Doctors, Clinics, and Hospitals would be freed of the impulse to provide total service, and utilize Referrals; this practice would eliminate underemployment of overcapitalized area medical provision. Even major Cities need only one Heart Hospital, or Cancer Hospital. The spread of Doctor specialization would be dictated by Patient need, not the best-paying specializations; it would also increase the level of General Practitioners. lgl

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