 What does the federal government actually spend our money on? How much of it is spent on federal employees and their pay? Are you sure you know the answers? To see how the federal government spends money, we'll look at 2012 since we have pretty complete data and see how the budget is broken down. We'll dig out the key facts and spare you as much as possible, but there's going to be a lot of numbers this time around. So get ready. In 2012, the amount spent was approximately $3.54 trillion. That's $1.28 trillion in discretionary spending, $2.24 trillion in mandatory spending, and $222 billion in interest on the debt. The government also received some money through specific taxes for specific purposes, which goes directly to those accounts, and is tracked as income so that we spend less regular taxes on those things. In 2012, the government got $209 billion of that. We talked about the difference between mandatory and discretionary spending in more detail in another video. But basically, Congress chooses discretionary spending in every budget, whereas mandatory spending is set by whatever law created that program. So Congress has to change the law to change the spending. Now, $3.54 trillion is a lot of dough. Let's break it down a little bit more by budget category. We spent about $678 billion on national defense. You know, soldiers, missiles, cyber attack teams, that sort of stuff. We spent $47 billion on international affairs, diplomats, treaties, and so on. We spent $29 billion on science, space, and technology, stuff like government-funded research and the space program. We spent $15 billion on energy, be it in research or supplies. We spent $41 billion on the environment and natural resources. That means both enforcing environmental regulations and managing natural resources on public lands. We spent $18 billion on agriculture for things like farm subsidies. We spent $93 billion on transportation, whether it's airplanes, boats, trains, or roads. This includes both regulating transportation and building it. We spent $25 billion on community and regional development. This is giving out money to cities, communities, and states to build housing or other developments. We spent $91 billion on education, training, employment, and social services. That's everything from preschool to college, with some vocational training and benefits to student families as well. We spent $347 billion on health, which includes both paying to provide people with healthcare and also spending money on healthcare research. That's different than the $472 billion we spent on Medicare, which is just healthcare for seniors. We spent $541 billion on income security. This is the category that various assistance programs, like welfare, food stamps, unemployment, and so on, all fall into. We spent $773 billion on social security. We spent $124 billion on veterans benefits. We spent $56 billion on the administration of justice. This is federal cops, federal prisons, and federal lawyers. Finally, we spent $28 billion on general government. This is all the stuff the government does to manage itself. This is the percentage of all of this spending that goes towards each category. Some of these are still pretty big categories though. Let's split them up a bit more. Within the defense budget, $152 billion was spent on personnel. $282 billion was spent on operations and maintenance. $124 billion was spent on procurement, meaning buying things. $70 billion was spent on research, development, testing, and evaluation. $14 billion was spent on military construction. $2 billion was spent on family housing. $19 billion was spent on atomic defense activities. And $12 billion was spent on other unnamed defense-related activities. This either means military intelligence and other top-secret stuff, or it means we've finally built that giant fighting robot I've been asking for. Within the international affairs budget, $22 billion was spent on foreign aid. $11 billion on military or police aid. $13 billion on conducting foreign affairs. Diplomacy in office supplies. And $1.5 billion on information exchange activities and creating media and news to highlight the United States. The income security category is broken down this way. $8 billion on retirement and disability insurance programs that aren't social security. $122 billion on retirement and disability for federal employees. $94 billion on unemployment benefits. $48 billion on housing aid. $107 billion on food aid. And another $162 billion in an other category that includes refugee aid, direct cash payments, and the costs of administering these programs. Bear in mind that these are really big categories with a lot of money in them. Money can be spent in a lot of ways within those categories. Another way to break down spending is to count how much gets spent by the different major federal agencies. This is what the breakdown of the whole budget looks by agency. As you can see, a lot of the agencies get less than a percent of the total. Now, how many employees does the federal government have? We have figures from September of 2012. All of the employees in the judicial branch come to about 33,000. All of the legislative branch's employees come to about 29,000. All of the agencies in the executive branch together have about 2,696,000 employees. This is the breakdown by agency. The average federal salary is $78,000. The median salary, where half of them are above and half below, is $74,000. 74% of federal employees have college or graduate degrees. And we're done. Now that you've waited through all of this, not only can you have informed debates, you'll also impress people in bar trivia games focused on the federal budget. So, never. And there you have it.