After reading this article in the paper today, I started thinking. (no wisecracks) According to the US gov revenue website, revenue has increased since 2000 by $.3T. The percentage of GDP that is government revenue has dropped almost 5%. The GDP has risen almost $5T. That’s a lot of cash. If the percentage of revenue were the same from 2000 to 2010, an extra $700B would be in the federal government revenue figures. The “Bush tax cuts” definitely hurt the country. I mean, I would love to look at my budget and say I am projecting to have a surplus, so I will take the next ten years off and then see where I am. How stupid was that decision!!!! You should have at least looked at it annually to see if you could afford it.
That said, defense spending has doubled since 9/11. OW! Social safety net spending has doubled as a percentage of budget since 2000. Some of this is because revenues as a percentage of GDP has decreased. Much of it is because the housing bubble has caused a larger percentage of people to need the social safety net. Some of it is because people are not thinking clearly (how many million big screen TVs were bought for Super Bowl Sunday on credit, or as my daughter said yesterday someone in a homeless program was wondering how to purchase $200 Versace sunglasses, we routinely purchase $3 coffee) People want Stuff now. Medical costs are expanding exponentially (this means non-linear as a percentage of income, but more than that). As a country, we continue to allow jobs to go overseas. We continue to drain our monetary pool for foreign energy (and energy firms, oil companies pay little to no taxes) and we buy our stuff from across the seas. Our money just goes elsewhere, rather than staying here. Or it does not go out for product. Money is a symbol of something made. I dare you to tell me what was made in a hedge fund, or a leveraged purchase, or derivative trading, or betting against futures. The bank bailout cost millions of people their homes through default, but someone got to pocket that money. Soon, we will be paying for WATER just like we pay for gas now, as multinationals are getting into the water business now as a means of getting ready for the coming water shortage.
As a country this can’t continue. The debt just keeps getting higher. But what is the solution? Do I want to be the one to cut back? And give more back? These are not jingoistic questions with easy solutions. What gets cut? who gives back? Who gets taxed more? Who gives up what? Social security is an easy fix. Pay on the first $250000 you make instead of the first $105000. I have no easy solutions, but as country we need to understand the problem in detail. I found it telling in the article that states that get more money from the federal government than they pay into the kitty want government handouts cut and those states who pay more into the kitty are fine with higher tax rates and more government spending.