To support the claim of this post, that spending is too high whereas revenues are roughly where they should be, here are four graphs created from Office of Management and Budget data.

Federal receipts 2005 dollars

Federal receipts as percentage of gdp

Federal spending 2005 dollars

Federal spending as percentage of gdp

What you see is that receipts (taxes) have remained fairly constant, while spending has increased. As a percentage of GDP, spending (the last link), hasn’t increased that much until BO took office. The stimulus spending has not been stimulus spending. It has become permanent spending. That’s the problem*.

-JD Cross

* – updated: and if you want to point out that as a % of GDP receipts are down slightly, that’s fine. They’re not down that much (not as much as the spending increase). The bigger point you’re probably trying to make is how to increase receipts. It’s not obvious that increasing taxes is the answer. Increasing taxes (whether it’s tax rates, closing loopholes, or creating new taxes) may or may not increase receipts. People are awfully good at finding ways not to pay taxes. Really what raising or changing (or decreasing) taxes does is change incentives. It doesn’t necessarily do anything for Federal receipts.

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