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The Federal Government burns through a lot of cash, but while it seems to me like most of that cash must go to the military, in fact most of it goes to making people's lives better and helping them live healthier, longer lives.

SOME STATS
FEDERAL EMPLOYEES
Federal government, non military - 2.7 million
Of those, more than 600,000 are postal service
Around 95,000 work for the IRS
Federal Government Contractors - Between 5 and 7 million (different ways of figuring this out yield very different numbers)
Uniformed military - 1.4 million

LOCAL AND STATE EMPLOYEES
Local government, non-edu - More than 7 million (hard to keep track of.)
Local EDU govt employees - More than 7 million.

BUDGETS
Federal government moneys not spent on social service - 1.1 trillion
Local government spending - 1.8 trillion
Local government spending on EDU - 620B

Overall Government employment
12 Million or roughly 4% of Americans
Including contractors it's around 18 million, or 6%
The government's budget is around 24% of GDP


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Good morning John, you just got back to America from Jordan and Tunisia [Annotation: John didn't go to Tunisia... I have no idea why I said that] where you visited refugee camps and I'm really looking forward to any thoughts you might have from those places.

But, in the meantime, here from my very safe location in Missoula, Montana, I wanna talk about the government of America. It's a mess, right? We've heard that it's a mess. I'm not talking about politics right now, which is, just don't want to talk about that. I'm talking about the federal government, that massive, inefficient bureaucracy that does something, nobody really knows what, we're spending a lot of money, nothing's getting done. That's the idea... that we have in our heads.

Well, I am going to take kind of a radical position in this video and say that the federal government is effective, efficient and surprisingly small. I recently asked my followers on Twitter some questions about government employees, how many there are at the state level, at local level, the federal level, in military, education, that kind of thing. I asked those questions because I had looked this information up and found myself to be quite surprised by what I found. Pretty much everybody, including me, thought that there were roughly the same number of federal and state and local government employees. State and local governments employ more than 7 million people and that's not including education. The federal government employs less than 3 million people, fewer. People also dramatically overestimated the number of uniformed military we have and dramatically underestimated the number of people who work in public education. Which is by far the largest category of government employee, more than 7 million people work in public education.

But here's the truly remarkable statistic that I couldn't even believe when I first read it. Over the last 50 years, the number of federal government employees has increased by less than zero percent. It has decreased. It hasn't decreased a lot but it has not gone up! So if the budget is increasing, the economy is growing, the number of people in the country has increased by more than 100 million and the number of employees that manage this government has not gone up, is it any wonder that it seems difficult to deal with the federal government. There's more to manage and we're using the same number of people to manage it. Also, the budget has increased dramatically, but the number of people we're paying hasn't. What's going on?

Well first, a lot of it is spent on contractors, so that's when the government gives money to a private company to do things for it, whether that's goods and services, it could be like a janitorial company just cleaning up office buildings or it could be Lockheed Martin building fighter jets. That all adds up to about five hundred billion dollars. That's more than the federal government pays for its own employees, but still, the budget is three trillion dollars! Where's all that money going?

We give it away! 64% of the money the government spent this year was spent on social security, Medicare, Medicaid, poverty assistance and veteran's benefits. 64%. If you take out all of that stuff, state and local governments actually spend significantly more than the federal government. Politicians talk about skyrocketing spending and government bureaucratic inefficiency but those two things have nothing to do with each other. Skyrocketing costs have far more to do with demographic trends and increases in healthcare costs than they do with bureaucracy.

So, if you're watching this, try to keep these things in your head. The number of government employees hasn't increased in the last fifty years and those people do really good important work and they're pretty good at it. State and local governments have a huge effect on the lives of the people living there and they actually employ far more people than the federal government and those elections are extremely important. By far the largest category of government employee is the teacher. And a significant majority of the money the federal government spends is spent to help out old people and sick people and people who are very poor and people who risked their lives to protect this country.

John, I'll see you on Tuesday.