February 4, 2016

Federal Spending in Perspective: The Powerball Jackpot

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The recent record $1.6 billion Powerball lottery jackpot captured the nation’s attention. The sum is so immense, it’s hard for most of us to wrap our minds around. Another immense sum that’s hard for Americans to wrap their minds around is the amount of hardworking taxpayers’ money that the federal government spends on an annual and daily basis. In fiscal year 2015, the federal government spent $3,700 billion (or $3.7 trillion), which is more than $10 billion per day.

This week’s chart shows that although the Powerball jackpot was massive, it was considerably smaller than how much the federal government spent per day, on average, last year. Indeed, the federal government spent almost half a billion dollars per hour. That means that it would have taken Uncle Sam only 3.8 hours to spend the entire jackpot!

It’s worth noting that the federal government was also a winner. Assuming the three jackpot winners took the lump sum payout, the federal government will end up collecting around $400 million in taxes on it. Again, that is a massive sum, but it’s only equal to about one hour of federal spending.