Table of Contents
In a revised edition of “Where Does the Money Go?”, authors Scott Bittle and Jean Johnson provides a straightforward explanation of the federal budget and the United States future. It gives guidance to people who are concerned about where the country is heading but are not budget experts. This book was revised in 2011 where the government’s spending was fast tracking to a $15 trillion budget and three years after an earlier edition was published with a budget of $9 trillion (Bittle et al, 2011).
In three short years, the government experienced the worst financial crisis since the Great Depression; while creating a political monster of spending more money than it collects in taxes. Today, federal spending continues to grow, and government officials are turning a blind eye to this epidemic. In its simple and witty style, Bittle and Johnson provides insight on the federal budget and encourages its readers to hold our elected officials accountable.
Main Arguments of the Book
There are four essential points that the authors believe contributes to the US budget and debt crisis. First, the public is not making any demands on the government officials to resolve the budget issue. Most Americans are just sitting back and watching the miserable news on the economy doing little to nothing to help the issue. Bittle and Johnson realized what was going on and wrote this book to help the public understand the budget process and perhaps give them the push to challenge their government officials. For instance, every chapter offers the foundation for implementing change.
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Chapter sixteen provides an itemized list of the 2006 budget that shows how much was spent for each program and its pros and cons. This chapter also invites the reader to make their own adjustments to the federal budget to get a first-hand experience on what it takes to get the budget under control. So, if someone believes that removing a program will not put the government in jeopardy, they can try their theory out with this book. Chapter twelve gives insight on how to interpret the statements of politicians so that they can understand who is being genuine about saving the economy and who is not (Bittle et al, 2011, pgs. 243-246).
The second point is that the United States is seemingly addicted to spending more than it takes in. It is stated that the United States has spent more than it has taken in for the past thirty-one out of the last thirty-five years. Therefore, the United States has been in a deficit since 1970 (Bittle et al, 2011, pgs. 3-4). This type of spending is severely impacting the growth of the economy, as well as the everyday lives of Americans. Bittle and Johnson acknowledges that if the government continues on this route, there will not be enough money to pay for Social Security and Medicare for the boomers while doing what they are expected to do (Bittle et al, 2011, pg. 5).
Another point given by the authors is that the federal government does not tax individuals the actual amount that is required to help reduce the budget. It is clear that a politician who base their campaign on increasing taxes and spending cuts would lose the race. Most Americans do not want Social Security and Medicare to be compromised to help reduce the budget.
According to IRS.gov, the most current record (2008-2010) of the annual tax gap is estimated to be $458 billion, in comparison to $450 billion for the 2006 tax year. Due to their enforcement activities and late payments. The IRS was able to get an additional $52 billion in tax paid. This reduced the net tax gap for the 2008-2010 period to $406 billion per year” (IRS.gov, 2018). However, this is only an example of scratching the surface of the national debt.
Lastly, the United States has poor spending habits. In the book, Bittle and Johnson provides “Six Realities We Need to Accept to Solve This Problem”. There are two main points conveyed through these realities: 1) the need for the federal government to start learning how to manage its budget properly now, rather than later and 2) the country must develop a new mindset about their spending habits, how the budget is balanced, and the efforts taken to decrease the national debt if they want to solve this growing problem.
For instance, the federal government has borrowed more than two trillion dollars from the Social Security Trust Fund and because of their poor spending habits it is not likely that they will be putting the money back. In addition to that, foreign countries have up to ten trillion dollars held in U.S. Treasuries that is affecting the national debt (Bittle et al, 2011, pg. 39). If one of these countries decide to no longer hold their money in U.S. Treasury Bonds, other countries may follow suit. This scenario could lead to interest rates spiking and cause chaos in the stock and currency markets.
Criticisms of the Authors Work
There is no doubt that the authors given a compelling and informative perspective on the federal budget. They were able to do this by using direct language. Bittle and Johnson did not sugar coat the country’s budget problems. Also, there is a substantiated number of credible sources that Bittle and Johnson used to back up their claims on the national budget. They did a great job at sourcing their information, supporting their findings, and discussing the methodology; which enabled the reader dig deeper into the information.
Furthermore, Bittle and Johnson preferred to reference data and policies that came directly from the government. This automatically removes the bias and encourages the reader to see the inferences of the data for what it is. In addition to that, the authors have an extensive background of knowledge and experience on this matter. Bittle is an executive director for PublicAgenda.org, written award-winning articles, prepared citizen guides in issues such as the deficit, Social Security, and the American economy.
Johnson is the executive vice president of Public Agenda and have over twenty years of experience understanding public issues such as, retirement and health care. This allows the readers to trust the authors perspective and help them believe the information they are getting is genuine. Lastly, they provide tools for the reader to make their own decisions about the national budget crisis.
The authors did this by using graphs, charts, and evaluations in terminologies that helps the reader understand and visualize the severity of the national debt. For instance, in chapter four, the authors give clarification on what a billion dollars is work. They do this by showing what an average person can buy with this amount of money.
One of these examples are that the U.S. can give “four spiral notebooks to every student in public school in the United States”, that is about 39.2 million children (Bittle et al, 2011, pg. 52). Now, taking it a step further with a trillion dollars is mind-boggling. However, the authors did a great job at using real-world products to symbolize the amount of money the United States owe. For instance, we have almost 300 million people in the U.S. and with one trillion dollars someone can give $3,333.33 to each person.
However, there were some things in the book that was not covered and/or was not clear to the reader. For instance, Bittle and Johnson did provide suggestions and alternatives that could be made to reduce the national budget; but it did not stick to one exact answer. There are so many avenues that the government can take, so it makes it hard for anyone to develop a solid plan. It is great to provide the tools to help the reader determine their own perspective, but it come as a disservice when there is confusion on what is the correct thing to do. It comes to a point where the government will have to go through a process of elimination. If they do it like this, it will take even longer to get the budget under control.
Conclusions and Recommendations
Overall, “Where Does the Money Go?” does an excellent job at explaining fiscal spending, the growing deficit crisis, and consequences America will experience if these bad habits continue. This book is relevant to the budgeting practice and this course because it educates the reader on the truths, myths, and issues associated with the national budget. For instance, the book effectively uses data and collective views to answer the most complex questions about public budgeting such as, How does the government generate funds? How does the government spend their money? Does the government handle the budget responsibly and fair? Therefore, it enables its audience to gain theoretical knowledge about the budgeting process, be more analytical on the practices of American economics, and determine how they can be better consumers.
I’ve learned by reading this book the factors involved in the U.S. financial crisis, understand the budgeting process, the importance of being aware of this problem and doing something about it, and showing me that I am part of the problem, but can also be the solution. I was also able to build an informed foundation on what changes need to be made in America in regard to how we spend and collect money. I understand that this is a problem that we can no longer ignore and must do our best as a country to get the federal spending under control so that we can save our economy.
