Editor’s Note: Social Security retirement benefits are a debt owed by the Federal government to retired workers – a detail CBO omits in their newly released budget graphics. Benefits are paid from incoming payroll tax dollars withheld for that purpose. Surplus payroll taxes create debt because they’re put into U.S. Treasury securities owned by the Social Security Trust Fund. The money is then spent elsewhere.
“…the $2.7 trillion of Treasury securities held by the Trust Fund came about not because entitlements are out of control and the government has been forced to borrow to meet retiree benefits, but rather because future retirees have paid more taxes than necessary to meet benefit obligations. Workers have essentially been prepaying into the Trust Fund in order to provide for their future benefits.”
by The U.S. Congressional Budget Office
The Congressional Budget Office has released infographics that show how much the federal government spent and took in during fiscal year 2015, as well as broader trends in the budget over the past few decades.
Overall budget numbers:
“At $439 billion, the 2015 deﬁcit constituted the smallest since 2007, and at 2.5 percent of gross domestic product, it was below the average deﬁcit (relative to the size of the economy) over the past 50 years. However, the large deﬁcits recorded during the most recent recession and subsequent weak recovery substantially increased federal debt—in 2015, debt reached 74 percent of GDP, slightly less than the ratio in 2014 but higher than in any other year since 1950. Such a high level of debt could have serious negative consequences for the nation, including restraining economic growth in the long term, giving policymakers less ﬂexibility to respond to unexpected challenges, and eventually increasing the risk of a ﬁnancial crisis.”