Does Government Waste Matter In The Big Picture?

The biggest form of government waste in 2010 was no surprise – Medicare payments. Statistics suggest that Medicare paid out about $48 billion in improper payments out of a total of about $560 billion in payments it made. In short, about 8.5 percent give or take. That is a huge number and there is some suggestion it might be much higher as the tracking isn’t read hot. Still, this represents about 40 percent of all waste by the government last year. 

The financial inequity in this country has become so obscenely out of balance that a billion is no longer a big number when considering our overall financial situation. We currently bring in about $2.7 trillion a year in total tax receipts and pay out a bit over $4 trillion. This means we effectively run an annual deficit of $1.5 trillion or so. This, of course, adds to our overall national debt of $14.3 trillion or so. Given these numbers, $100 billion in government waste each year is not a big number even though it clear is something that should be dealt with sooner rather than later.

When we move to the big picture for government finances, things become even uglier. The thing no politician wants to admit is we are in major financial trouble moving forward. We are legally required to fund various medical programs [Medicare, Medicaid, etc] and Social Security to the tune of $60 TRILLION plus over the next 30 years or so. Add in our current national debt of $14.4 trillion and we are talking about owing $75 trillion. Government waste is a drop in the bucket when considering this amount. At $100 billion a year accumulated for 30 years, we are looking at a $3 trillion dollars. That is a lot of money, but not when compared to the overall picture. 

The point of this article is not to forgive or make light of government waste. It is a problem and, frankly, a disgusting one. Having said that, it is also a red herring that politicians will try to foist upon you to cover their shortcomings. With election season coming up, warning lights should go on when you hear a politician complain about government waste. When they say this, they are skirting the three big issues that really are the key to getting our financial situation in order. Until a politician is willing to address Medicare, Social Security and defense spending, there is NO SOLUTION that will get our finances in order.

I hate government waste. You hate government waste. If we got rid of every penny of waste, however, we wouldn’t make even a small dent in our financial problems. When you think about it, that is pretty sad.