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USA Inc. “Business Lines” Have Expanded
From Defense to Insurance & Other Areas

USA Inc. Major ‘Business Line’ Spending as % of GDP, F1800 vs. F1900 vs. F2000

F1800
2.2%

F1900
2.5%

F2000
18.2%

[Pie Chart F1800]
Other 0.3%
Defense 1.3%
Interest Payment 0.7%

[Pie Chart F1900]
Other 1.4%
Defense 0.9%
Interest Payment 0.2%

[Pie Chart F2000]
Defense 3.0%
Interest Payment 2.3%
Retirement + Disability Insurance* 4.2%
Health Insurance* 3.6%
Other 5.1%

Note: Fiscal year 1800 / 1900 ended in June. Fiscal year 2000 ended in September. *Health insurance includes Medicare, Medicaid (federal portion)
and other federal health programs, retirement and disability insurance is Social Security. Other spending includes public sector employee and veteran
pension & benefits cost and spending on community development, law enforcement / education / public infrastructure / energy, etc. Source: 1800 /
1900 data per Census Bureau, 2000 per White House OMB.
KP
CB www.kpcb.com
USA Inc. | High Level Thoughts 39

USA Inc. First 155 Years (1776-1930) = Era of Defense
Dept. of Army + Navy = 41%¹ of Cumulative Spending From 1789-1930

USA Inc.’s Budget Outlays For the First 155 Years (1776-1930)²

1789-1930
1789-1791 ... 1800 ... 1850 ... 1900 ... 1930 Cumulative

Total Federal Government Outlays ($MM) $4 $11 $40 $521 $3,320 $98,747

Defense $1 $6 $17 $191 $839 $40,332
% of Total Outlays 15% 56% 44% 37% 25% 41%

Dept. of the Army $1 $3 $9 $135 $465 $28,831
% of Total Outlays 15% 24% 24% 26% 14% 29%

Dept. of the Navy $0 $3 $8 $56 $374 $11,500
% of Total Outlays -- 32% 20% 11% 11% 12%

Interest on the Public Debt $2 $3 $4 $40 $659 $13,790
% of Total Outlays 55% 31% 10% 8% 20% 14%

Other* $1 $1 $18 $290 $1,822 $44,626
% of Total Outlays 30% 13% 47% 56% 55% 45%

Veteran Compensation and Pensions $0 $0 $2 $141 $221 $8,273
% of Total Outlays 4% 1% 5% 27% 7% 8%

Note: Data is rounded and not adjusted for inflation. 1) 41% is the cumulative defense spending (excluding veterans’ benefits and services) as % of
cumulative total federal spending from 1789 to 1930. Including veterans’ benefits and services, defense spending would have been 49% of cumulative
annual budget from 1789 to 1930. 2) Data not available from 1776 to 1789. * Other includes various spending on administration, legislation and veteran
compensation and pensions. Source: Census Bureau, “Historical Statistics of the United States, Colonial Times to 1970,” Data series Y 457-465.
KP
CB www.kpcb.com
USA Inc. | High Level Thoughts 40

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