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By law, every publicly-traded corporation in the United States must issue an annual document called a Form 10-K, an annual summary of the state of the company and its finances aimed at informing its shareholders. They are the no-spin version, required in code to contain enough information to be “not misleading.”
Unlike public companies, the American government as a whole (federal, state, and local) does not issue a similar document. We’ve stepped in, writing the 2019 United States Government’s 10-K, highlighting not only the state of the government’s finances, but other key metrics that show the state of the nation today.
The document is a comprehensive look at the status of the United States, highlighting the government’s data on topics as varied as Social Security beneficiaries, health care spending, and vehicle crashes.
This year’s full document can be accessed here, but here are seven key takeaways from this year’s report:
With Americans getting older, the government is spending more on Social Security and Medicare.
Between 2006 and 2016, Social Security payments increased $360 billion or 66 percent, while Medicare payments went up $305 billion or 82 percent. Both of these figures went up due to a growing elderly population as well as increasing payments and costs. During that period, the American population 65 years and older went up 12.1 million or 33 percent.
The 10-K notes that forecasts show that, without policy changes, the Medicare Hospital Insurance Trust Fund is forecast to be depleted as early as 2023 and the Old-Age and Survivors Insurance and Disability Insurance trust funds may be depleted as early as 2030.
Increases in government revenue have not kept up with increases in government spending.
In 2016, federal, state and local governments combined took in $5.097 trillion, up 26 percent from $4.04 trillion in 2006. Spending during that period increased nearly $800 billion more, with $5.852 trillion in expenditures in 2016, which is up 43 percent from the $4.082 trillion spent in 2006.
Except for revenue from corporate taxes, which decreased 13 percent among all governments between 2006 to 2016, the government has seen an increase in revenue from all other taxes, due to both changes in tax policy and higher overall taxable income. (This year’s report doesn’t include analysis of the federal tax changes that went into effect in 2018.)
In addition to growth in Social Security and Medicare payments, the federal government saw a $95 billion increase in spending on veterans’ benefits during that period, despite a 15 percent decline in the number of veterans. State governments saw a $246 billion or 85 percent increase in Medicaid and CHIP payments as the number of enrollees has increased since the 2010 enactment of the Affordable Care Act.
In the last few years, there has been a drop in spending on financial assistance programs.
Multiple government programs aimed at helping the disadvantaged saw spending increase in the years following the Great Recession. Participation in and spending on many of those are now declining.
American households are earning, spending, and saving a bit more. They’re also less likely to own their homes.
Between 2006 and 2016, the median annual wage has increased 2 percent since 2006, from $36,210 to $37,040. The average household increased spending just 1 percent, from $92,606 to $93,937. The disposable income savings rate has also increased from 9 percent to 13 percent.
During the same period, homeownership has dropped as a percentage of households from 69 percent to 64 percent.
Natural disasters are becoming more costly.
Disaster costs increased 256 percent in the past decade even as the disaster declarations decreased 28 percent. Per disaster, costs increased 382% over the past decade. Costs, on an absolute and per disaster basis, have increased over the past decade for floods, fires, and other disasters.
Overall crime, arrests, and imprisonments are going down, but there’s been a recent uptick in violent crime.
While property crime rates fell 27 percent between 2006 and 2016 and violent crime rates fell 19 percent, violent rates did increase 3 percent between 2015 and 2016. During that same one-year period, the drug-related arrest rate increased 5 percent.
Incarceration rates, both in general and among youths, have fallen since 2006.
The cost of higher education has increased, but the federal government is spending less on education.
The average annual cost of undergraduate education, adjusted for inflation, increased 28 percent between 2006 and 2016. At the same time, federal spending on education dropped $26 billion or 67 percent. Between 2015 and 2016, there was a $14 billion or 58% decrease in Federal Direct Student Loans (FDSL) expenditures.
Read the full report and let us know contact us to tell us what you took away from the report.