Sunday, August 7, 2011

US Revenue and Spending

Enough introductory crap. I'm very concerned about the United States federal debt. We spend too much and we take in too little. Here's a web page that gives the raw figures for federal revenue and spending historically: http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=200

2008 to 2009 was the recent turning point from seemingly manageable to unmanageable:
2008: Revenue 2.5 trillion, Spending 3.0 trillion, Deficit 458 billion
2009: Revenue 2.1 trillion, Spending 3.5 trillion, Deficit 1.4 trillion

In one year, we went from spending 20% more than we took in to spending 67% more. Why did that happen? Well, due to the recession, tax revenue was much lower. And due to the "stimulus" plan to combat the recession, spending was much higher. But what concerns me more is that the politicians are not as freaked out by this as any sane person would be.

I could generate some supporting numbers, but it is intuitive that this kind of discrepancy can't go on. So what do the politicians want to do? The Democrats want to raise taxes. The Republicans want to lower spending. Don't we need to do both? We're out of whack by 67 freaking percent!

President Obama has given lip service to a "balanced approach", his way of saying "do both". But I haven't seen any serious spending reduction proposals from him in the near term. His approach seems to be "raise taxes now, and we'll lower spending eventually."

Republicans seem burdened by a pledge not to raise taxes. Never trust a politician who makes pledges. Either they won't stick to them, in which case they are liars, or they will stick to them, in which case they are very poor politicians, not willing to adjust to changes in the world and the political situation. I think that it's important to keep taxes low, but I'll discuss my tax perspective at another time. It just seems obvious that we need more tax revenue now.

Democrats don't want to cut anything. The recent debt ceiling compromise is a joke, planning to cut 2 trillion of mostly unidentified expenses over 10 years, during which time we're expecting the debt to grow 10 trillion. Just go back to 2008 spending numbers and you'll save many times more than that. Is that so far in the past that it's absurd, that we couldn't possibly live that way?

No one in Washington is taking this seriously enough. It looks like we need a new crew there ASAP.

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