How to Spend $3.9 Trillion

2 Pages Posted: 26 Sep 2014

Date Written: February 15, 2014


The federal budget includes a vast array of programs in hundreds of agencies. But when boiled down, the budget consists of just five basic spending activities: compensating federal workers, purchasing goods and services, giving aid to state and local governments, transferring wealth through subsidy and benefit programs, and paying interest on the federal debt. The federal government spent $3.9 trillion in 2013, according to the Bureau of Economic Analysis (BEA).

Transfers were the largest spending activity at $1.98 trillion, followed by purchases at $571 billion, aid to the states at $510 billion, interest at $414 billion, and compensation at $407 billion.

Keywords: Federal Budget, Federal Spending Trends, spending cuts

JEL Classification: H6, H61, H68

Suggested Citation

Edwards, Chris, How to Spend $3.9 Trillion (February 15, 2014). Cato Institute Tax and Budget Bulletin, No. 69, February 2014, Available at SSRN:

Chris Edwards (Contact Author)

Cato Institute ( email )

1000 Massachusetts Avenue, N.W.
Washington, DC 20001-5403
United States

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