With the recent near-default of the American government, we are forced to take a closer look at the dark rabbit hole that has become the federal budget. A short plunge into history will surface in a debate of the politics of the current financial crisis: Over the past century, the world has changed dramatically, contributing to and resulting from globalization.

Like the domino effect, once science reached a certain point of innovation, the world population exploded, creating a systematic and uncontrollable increase in both processes over the following years. The U.S. government reflects a clear example of this incredulous expansion. The 20^th century saw America transform from an infant nation into the leading nation of efficiency, compassion, and modernity.

At the helm of the 1900’s, the U.S. government consumed merely 6.9 percent of Gross Domestic Product (GDP, a minority of which was due to federal spending. However, World War I brought a kick to spending, and culminating at about 12 percent of GDP in the 1920s.

President Roosevelt and the New Deal brought spending up to 20 percent during the Great Depression, but it was during World War II that government spending peaked to 53 percent of GDP in 1945. In terms of government spending, the post -World War II era marked itself as the Golden Age, despite President Clinton’s 1995 declaration that big government spending has finally come to an end.

Immediately after WWII, spending dropped to 21 percent, but by the recession of 1980-82, hit a peak of 36 percent. Government spending averaged 32 percent of GDP until the disastrous recession of 2008, in which spending surged to wartime-like spending, 45 percent, thanks to bank and automotive industry bailouts.

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The federal budget for the 2011 fiscal year outlines exactly what the enormous percentage of the GDP amounts to. As seen in the pie chart below, courtesy of usgovernmentspending.com, the $3.8 trillion in expenditures is divided into 5 categories, in descending order of dollars spent: defense, healthcare, pensions, “other”, and welfare.

Defense, 25 percent of the budget, plunders a whopping one trillion dollars. Health follows at a close second with $0.9 trillion, or 23 percent. Pensions, at 21 percent, translate to $0.8 trillion. Welfare constitutes 13 percent of the budget with $0.5 trillion, with the remaining 18 percent pulling $0.6 trillion – including, but not limited to, education.

According to USA Today, the national debt has mounted to such a number that, to repay it entirely, each American household would have to fork over a whopping $668,621. In other words, with absolutely 0% interest, the most manageable payment plan would involve a $13,364 annual payment for the next 50 years per household, or approximately the annual tuition rate for a state-subsidized public American university.

To clarify, this number is only the amount of debt as it stands today, not the additional debt of next year, the year after, etc.

The level of debt has become so outrageous that, last month, the United States government was forced to raise its debt ceiling or face default. The latter decision would have crippled the government, rendering it incapable of basic function and placing the civil population into very real danger.

Welfare and public education would eventually become inaccessible, and troops abroad would be marooned without funding. Additionally, a debt default would have led to an enormous depreciation of the dollar and possible another global recession, due to a reduction in worth of all dollar-back assets worldwide.

Luckily, the Senate cobbled together a last minute compromise that left much to be desired. This heartbreaking piece of work was the result of months of partisan bickering and head-butting. As a result, the DJIA drop 1500 points in little over a week, and the S&P graciously downgraded U.S. debt for the first time in history.

How this will affect the American economy remains to be seen, but the future surely is not bright. Think the government can tighten their belts and spend within their limits? If it means we all must draw back a little bit, then here’s a rally towards a healthy economy in the unfortunately far off future.
Stephen C. / Shutterstock.com

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Even when something goes horribly wrong, as it did that September day in Tucson, the mental health budget of states are the first to be slashed.  The mentally ill usually do not have large lobbying groups or funds to help direct the voting in Washington.  The mentally ill are not known to be a voting bloc that lawmakers have to fear, such as senior citizens.  The severely mentally ill are usually relying on state and federal funding to survive because their mental illness disabled them to the point of not being able to work.

According to a study from the National Association of State Mental Health Program Directors’ Research Institute, states have cut $2.1 billion from their mental health budgets over the last three fiscal years.  And they are likely not done.  More spending cuts are expected in the coming weeks as states finalize their 2012 spending plans.  Another study from the National Alliance on Mental Illness finds that between fiscal years 2009 and 2011, 16 states and the District of Columbia cut their mental health budgets by more than 10 percent.

The reality is even worse than those numbers.  Up to now, federal stimulus money has helped soften the blow by sending in $103 billion to states through Medicaid since early 2009.  The money has helped to keep state-run health insurance program surviving for the past two years, but the money will end this summer.  Meanwhile, because of the economic crisis, the need for mental health services continues to grow.  With more and more unemployed and uninsured, more people are in line for public services—including mental health services.  “The safety net,” says Marylou Sudders, former Massachusetts commissioner for mental health, “is shredded.”

Mental illness is the leading cause of disability in the United States and Canada.  Nearly 6 percent of the U.S. population has a serious mental illness like schizophrenia or bipolar disorder.  People with severe mental illnesses are more likely to have low incomes because their education was interrupted by the disease, says Elaine Alfano, deputy policy director for the Judge David L. Bazelon Center for Mental Health Law in Washington, D.C. It is difficult for people with severe mental illness to get a job, but add the historic unemployment rates and employers are not going to hire someone with a mental illness.  Their unexplained behaviors can alienate friends and family. Their conditions can be expensive to treat, which puts a hefty burden on the government if they qualify for public support.

According to the state directors’ survey, in fiscal 2010 and 2011, roughly half the states reported reducing the number of hospital beds in state run psychiatric hospitals. They’ve limited the amount of money they pass on to out-patient providers and cut staff everywhere. A third of states say they’ve had to reduce the number of people their programs serve.  The numbers become even more distressing when you look at them state by state.

Mental illness has traditionally been unfunded.  Many of the psychiatric hospitals have closed, but money has not been redirected to community mental health centers in order to provide outpatient care.  We closed the hospitals and then closed our eyes and just pretended the mentally ill did not exist.  Community programs have done the best with what they have.  But, in the end, there is not enough staff to handle the outpatient demands.  This just leads to more hospitalizations, which is expensive.  If we put the money into funding mental illness in the first place, we would save money in the long run.  I know… a novel idea in Washington.  Sometimes you have to spend money to save in the long run.

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