A wise man once told me that when any tax-levying entity operates at a deficit,the possible causes number precisely two. Either it is taxing too little for how much it wants to spend,or it is spending too much for how much it wants to tax. It has either a revenue problem or a spending problem.
The problem for Republicans is that George W. Bush presided over massive increases in spending and the conversion of a budget surplus to a large deficit. According to Office of Management and Budget data,federal revenue in 2000 totaled just under $2 trillion,while spending was about $1.8 trillion—a $200 billion surplus. By 2008,we had a deficit of $500 billion because spending had increased 67 percent (to 18 percent of GDP) while revenue increased only 25 percent over Bush’s eight years.
By 2012,Barack Obama’s deficit settled in at about $1.3 trillion,a 160 percent increase over 2008. OMB estimates for 2012 show that while annual revenue increased about 17 percent since Obama took office,annual spending increased 27 percent (to 24 percent of GDP).
So,is that a revenue problem or a spending problem? Well,if you ask Democrat leaders and pundits,it’s definitely not the spending. Congresswoman Nancy Pelosi doesn’t believe we have a spending problem,nor does Senator Tom Harkin—to provide just two recent examples. As for pundits,countThe Daily Kos, Mother Jones,and Paul Krugman amongst the “spending problem deniers.”
Democrats seem pretty convinced of this. So,here’s an idea:What if we just agreed that we have a revenue problem and tried to erase the deficit with new taxes alone?
Read More at OfficialWire . By Dr. R.B.A. Di Muccio.