When the US federal government spends money, expenses are officially categorized in three different ways:

Mandatory spending includes entitlements like Medicare, Social Security, VA benefits, etc. which are REQUIRED by law to be paid.

Interest on the debt. 

Discretionary spending includes nearly everything we think of related
to government– the Military, all of the Alphabet agencies, the courts, Federal prisons, foreign aid, food stamps, welfare, bailouts, etc.

The two categories that must be spent every year are the interest on the debt, and mandatory spending. That totaled about $2.5 trillion in FY 2011.

The government took in about $2.3 trillion in tax revenue in FY2011. Even if the rest of government had been shut down, we would still have a $200 billion deficit. With the discretionary fund, this resulted in a deficit of $1.3 trillion.

What does this mean? This means that the government could confiscate 100% of the income of the top 1% of wage earners (anyone who makes more than $340,000 a year), and there would still be a $300 billion deficit.

In fact, increasing the taxes of all Americans by a third (133% of last year) would still require that all government discretionary spending be cut in half.

Does anyone here think that we can fix this?

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