Wednesday, December 5, 2012

We Do Not Have A Revenue Problem

As the deadline to stop the automatic tax increases and budget cuts collectively known as the "Fiscal Cliff" looms ever larger, we here a lot about "increased revenue."  This is simply 1984 Newspeak for "tax rate hikes."  The only question, it seems, is whether they should be called tax hikes, in which case actual marginal rates would go up, or whether it should be called "closing loopholes," and use the obfuscation of keeping marginal rates the same but removing deductions to increase taxes.  Based on both the Republicans' and Democrats' talking points, you'd think that the United States Government was the orphan Oliver asking, "Please sir, I'd like some more."

This is ludicrous.  The United States does not have a revenue problem, we have a spending problem. 

According to, the United States Government took in 2.486 trillion dollars in 2012.  According to Economy Watch, the projected US GDP for 2012 is 15.880 trillion dollars.  This means that the US Government will take in around 15.6% of GDP in direct revenue.  This a little on the low side, but well within statistical averages for the last several decades.

Taking in roughly 1/7th of the GDP as revenue should be more than sufficient.  The problem is not revenue.  The problem is spending.  For 2012, the US Deficit is projected to be over 1.3 trillion dollars.  That means the United States is spending more than 150% of the revenue it takes in.  Total Debt is projected to be over 16 trillion dollars, or roughly 103% of GDP. 

This is insane.  There is no way, if we confiscated all the wealth from every person living in the United States, that we could pay our bills.  This is like a family making $250,000/yr spending $380,000, and already being over one million dollars in debt.  What has to be cut is spending.  And the biggest drains on the treasury are entitlements, followed by military spending.

Any discussion of the budget that does not include massive cuts to entitlement and (sorry, to say) military spending is simply not serious.  Any discussion of the budget which has as its premise that we need higher revenue is simply not serious.  It is political posturing, and posing for the cameras.  Such discussions are aimed to score political points and harm political opponents.  Anyone engaging in such rhetoric should be immediately dismissed as unserious, at best, and disingenuous at worst.

Speaker Boehner, this means you.

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