On the Fence

My brother wrote and sent the following out to some friends via email. I’m re-posting with his permission. For the record, he’s brilliant and not overly political. This was originally sent on Sept 6, 2012. +++++++++ I never do this (hit reply to all) but, in this instance, I can’t resist. First off, the facts about the federal budget. As you can see from the attached spreadsheet (provided courtesy of the US Office of Management and Budget), federal tax receipts have averaged 17.8% of GDP from 1950 – 2011. Yes it has fluctuated from a high of 20.6% to the recent lows of 15.1% (the effect of the stimulus checks the government sent out 2008 and again in 2009), but across ALL tax regimes, the feds seem to take about 18% of GDP as their “revenue.” On the spending side, federal outlays averaged 20% from 1950 – 2011; if you exclude the last 3 years of profligacy, the long term average is 19.8%. This is across history that includes wars, energy instability, several world-wide debt crises (albeit not in Europe) and all sorts of things. So, to recap, across a long time span, the federal government has run a deficit of about 2% per year. We can afford to do this because, among other things, out economy grows at a rate in excess of 2% per year (usually) so the 2% deficit of 10 years ago only represents 1% of today’s GDP. AS LONG AS GDP GROWTH IS MORE THAN THE STRUCTURAL DEFICIT, WE CAN KEEP DOING THIS. And the opposite is true. In the 3 years since t...
Source: Surgical Diversions - Category: Surgeons Authors: Tags: life-unscripted economy Source Type: blogs