"Our Country!
In her intercourse with foreign nations may she always be in the right;
but right or wrong, our country!"

    --Commodore Stephen Decatur

Wednesday, April 20, 2011

How To Lie With Statistics

Let us ignore some of the more glaring inaccuracies with the new "Tax Receipt" calculator that was created by the White House on Monday and instead focus on the more subtle manipulation of the data to accomplish President Obama's political goal of shifting attention away from entitlement reform.

Using the White House's default setting for a family of four making $80,000/year, the application helpfully breaks down how much of this hypothetical family's taxes go to different categories.  However, what immediately jumps out is that the (large) portion of taxes that go to Social Security and Medicare are not included in the percentages even though they are counted towards the total spending at the bottom.

By omitting entitlements, the percentage for defense spending is inflated drastically so that it appears as the largest share of spending, just narrowly edging out the next largest category--health care.  However, if we include entitlements, the picture changes dramatically.  According to the White House numbers, defense spending is really only 12% of overall spending, not 26%.

Also, if we look at the broad categories of welfare spending vs. government spending on constitutionally enumerated powers like defense, law enforcement, and foreign relations, we can easily see that spending on the welfare state in this country accounts for more than 80% of the hypothetical family's tax payments for that year.

Worse still, if we conjecture that the parents of this family are under the age of 40, it is almost guaranteed that neither parent will ever see a dime of the money that they are currently paying into the system, because Social Security and Medicare will be completely bankrupt and interest on the national debt will have overtaken non-defense discretionary spending by the time they retire.  Meanwhile, their children will be left with a debt they will never be able to pay down.

The hard truth that Obama doesn't want you to know is that the 20th century welfare state is at its breaking point.  The welfare programs currently in place benefit some, but unless Congress is able to implement drastic reforms, these programs will cease to function within our lifetimes.  The choice now is clear: we can follow President Obama in ignoring and obfuscating the problem, or we can have the courage to make serious reforms.