The U.S government has spent $5.35 trillion in fiscal year 2022 to ensure the well-being of the people of the United States. The federal government spends money on a variety of goods, programs, and services that support the economy, and the interest it has incurred on outstanding federal debt (Cowen & Tabarrok, 2021, Pg. 600). Consequently, as the debt grows, the spending on interest expense also generally grows. If the government spends more than it collects in revenue, then there is a budget deficit. If the government spends less than it collects in revenue, there is a budget surplus. The federal budget is divided into approximately 20 catagories, known as budget functions ( Federal Budget, 2012, Chpt. 37). These categories organize federal spending into topics based on their purpose (National Defense, Transportation, and Health, etc). Government spending is broken down into two primary categories: Mandatory and Discretionary. Mandatory spending represents nearly two-thirds of annual federal spending. This type of spending does not require an annual role by Congress. The second major category is discretionary spending. The difference between the both related to whether spending is dictated by prior law or voted on in the annual appropriations process. Due to authorization laws, the funding for these programs must be allocated for spending each year, hence the term mandatory (Individual Tax, 2017, chpt. 23).
Regent University. Understanding the Federal Budget Process in 9 Minutes Part 1 (2012). The Federal Budget. Retrieved from:. https://www.youtube.con/watch?v=cviXIiRD6r8.
Regent University. Tax Treaties Part 1 (2017). International Tax. The Individual Income Tax. Retrieved from:. https://www.youtube.con/watch?v=8UEr264yAJI.
Modern Principles of Economics, 5th Edition (New York: Worth Publishers, 2021), Tyler Cowen & Alex Tabarrok.
I do not think many people consider the interest incurred on our debt. Amadeo (2022) shares, "The U.S. debt-to-GDP ratio was around 125% through most of 2021. Gross domestic product measures a country's entire economic output. Lenders worry whether the country will repay them when a country's debt is close to or greater than the entire country's production. " (para. 19, 20) As lenders become more concerned, it is likely that lenders reduce or retract loans. This may increase interest rates more. Thank you for pointing out the differences between mandatory and discretionary spending. Your brief summary on the Federal Budget and spending was quite informative, and indicates that the process to making the Federal Budget is quite complex and that spending isn't as simple as one might think (discretionary spending).
References
Amadeo, K. (2022). Interest on the National Debt and How It Affects You. The Balance. Retrieved 2 October 2022, from https://www.thebalancemoney.com/interest-on-the-national-debt-4119024#:~:text=Interest%20on%20the%20Debt%20by%20Year%20%20,%20%206.8%25%20%206%20more%20rows%20.