Balaji at Network School: “we think the government should be 5% of GDP
Vs the US (what would you zero out?)
Federal spending is about 23–24% of U.S. GDP in recent years. Think of it as a big, lopsided pie with a fondness for retirees and missiles. The rough allocation looks like this:
Elderly:
Around 10% of GDP.
This includes Social Security (~5% GDP) and Medicare (~5% GDP). America’s fiscal metabolism is geriatric-centric; these two dominate everything else.
Poor / Income Support:
Roughly 2–3% of GDP.
This covers programs like SNAP, the Earned Income Tax Credit, housing vouchers, TANF, SSI for the disabled poor, and other means-tested transfers. It’s much smaller than political rhetoric suggests.
Sick (non-elderly health care):
About 2% of GDP.
Primarily Medicaid for non-elderly recipients, plus ACA subsidies. Medicaid is half elderly/disabled and half low-income adults and kids; this bucket is the non-elderly portion.
Security / Defense:
Roughly 3% of GDP.
This is the Pentagon’s world: personnel, procurement, R&D, operations. Add another ~0.3% for homeland security and veterans’ health if you want a more expansive definition.
“Everything Else”:
Around 5–6% of GDP.
This grab-bag covers the civil service, transportation, science, education, diplomacy, agriculture, energy, courts, and the machinery that keeps a continental republic humming—basically the part everyone forgets exists.