The same folks will ignore corporate socialism/welfare to line their own wallets.
…
It is just a matter of who is at the top of the line to make a living. Getting in line at the top is labeled regardless as talent. LOL Getting in line last is labeled as failed.
Umm, excuse me. I explicitly mentioned the idle rich - among which I include Goldman Sachs whose CEO had the eternal nerve to say they were doing God’s work even as they were sucking the government’s teat while middle class Americans were getting their house prices and 401Ks getting decimated. So your comment is very much misdirected.
The Federal government is too big, period. It was about 20% of the GDP for the longest time. But the last 20 years under Dems and Repubs saw it swell ipto 26% which is unsustainable. This is nothing to do with political philosophy. Practically, despite the multplier (1.6 to be generous), the government is a net DRAIN on the economy. You cannot Stimulate the economystarving it by taking out Texas
Supply side economics meant slow growth for the private sector. That is the only reason the public sector is a relatively larger proportion of the economy.
The failure was our political philosophy. The government is not too big. We made a few people wealthier but all of them and the rest of us would have been much wealthier without supply side economics.
We en mas had been seeing to our own demise as a nation. Just being cheap with honest hard working people. We are reaping what we have sown as boomers.
The Millennials, Zs and Xers are saying no thank you. No way!
If you look at every aspect of society and the decisions made en mas by the boomers there is nothing decent we ever did.
It is indeed true. The cost of governing ourselves (total governing including federal, state, local, excise, etc) has been going up pretty much monotonically for decades, over a century. Some people, like @Goofyhoofy believe that if spent on “good” stuff, this can go on indefinitely. Others, like me, believe that it can’t be a good thing because it doesn’t appear to be stable. It could reach a point at which stability is threatened and then the USA experiment ends. That doesn’t mean it WILL happen, but it means that there is some probability that it could happen.
You might notice that in the past, spending spiked for emergencies (like WWII), but after the emergency was over, spending dropped to where it was previously. But in recent emergencies (GFC for example), spending spikes, but doesn’t quite come down to the previous level, it remains a percent or two above the previous level. For the COVID emergency, it remains to be seen, but so far it appears that spending is still elevated somewhat. We shall see in a year or so if it ever gets back down. But it doesn’t matter anyway, the trend is up up up with the passing of the decades.
Of course it has to do with economic ideology…“just trust us supply side economics will leave money in the hands of the rich to grow the economy”…an utter and complete lie.
If we do not use the federal government to grow the economy, then of course the government is percentage wise a larger share of the GDP. If you can not fathom that you really have no clue at all how economics works. But then again if you thought supply side econ was going to work you have no clue from 1981 till now and we have $31 trillion in debt.
Lets just shut up and grow the US economy instead of putzing around with tax breaks for wealthy people. If you are wealthy you have no problem paying the taxes. If you are not keep playing the lottery and hoping taxes are low when you hit. Because that is the size of finding suckers for supply side economics.
Honestly there are people with opinions but zero education on the topic in this discussion. It is ultra rude to insist this nation keep hammering its head on supply side econ just because the topic is way over your head. Not aimed anyone in particular. Just say’n it never worked.
I must say when someone is very guilty of messing up entirely do not look for bedfellows. Just change your ways. Admit it wont work and move on. It is the adult thing to do.
BTW just for hahahas the spikes in spending since 1990 always begin with the supply side presidents. The drops in spending always begin with the demand side presidents. So the entire exercise of figuring out the bedfellows are all guilty is more just avoiding reality.
I find it interesting that as a percentage of GDP, US federal revenues have remained relatively constant over the decades – despite large differences in tax rates – in a band from 15 to 20%. Even during WW2 it did not exceed 20%.
Interesting is a good word. It is important to realize that the difference between the red line (spending) and the blue line (revenue) is CUMULATIVE … it’s what we commonly call the “US National Debt” which is over $31 TRILLION at this point. For every one percent increase in interest rates, over time (because we constantly refinance almost all our debt, plus some of the accumulated interest), our interest expense goes up by $310 billion a year.
The key is the proportion of the deficit and the debt to GDP. The deficit is annual and the debt is the cumulative deficits of past years.
Federal Surplus or Deficit [-] as Percent of Gross Domestic Product, 2021 = -12%
Federal Debt: Total Public Debt as Percent of Gross Domestic Product, Q3 2022 = 120%
This is only Federal government debt and doesn’t include state or local debts. It also doesn’t include unfunded future liabilities, such as Social Security, Medicare, pensions, etc.
This is only possible without increasing Treasury debt interest rates because the Federal Reserve is buying an ever-increasing portion of the debt with fiat money created out of thin air. In 2021, the Fed bought almost 25% of all 10 year Treasury bonds to suppress long-term interest rates.
Read the book, “This Time is Different,” by Reinhart and Rogoff, for hundreds of years of history of countries that overspent and had sovereign debt > 100% of GDP. Although they didn’t have a Federal Reserve, many did dilute their hard money (gold) with base money which was the equivalent of what the Fed is doing now. The result was inflation. Inflation is inevitable when the amount of money (demand) grows faster than the supply of goods and services.
If by “indefinitely” you mean “forever” then I disagree. Nothing is forever. For a very long time? Yes. Between 1850 and 1900 the US ran a budget deficit of around 6%. Until World War I it was relatively in balance, plus or minus. During World War I it was massively in deficit, came out for a few years, then went significantly negative during the Depression and even more so during World War II.
It has gotten even more so lately, obviously, but frankly I am unable to see how we might end that. People aren’t going to elect politicians who promise to do less; when we were (briefly) in surplus the mantra changed to “we can afford a tax cut” and it’s been that way ever since.
That said, I am mindful that there are some things which require “more.” Policing is more complicated and expensive now, what with DNA and a populace armed with assault rifles. I do not complain when government tries to rescue the ‘free market’ (2008), since not doing so would put us back to 1930. I am mindful that there are ever more highways, that the space program did the heavy lifting of satellite communication before the private sector even thought about getting involved, that much medical research happens outside the profit motive, and that fewer regulators often ends badly (financial markets, airline safety, etc.)
Personally I’d be in favor of fewer farm price supports (but just try to get elected without them) and a few other things - but those are mostly just at the margins of the problem anyway. The big dollars are in Social Security and Medicare and the military.
Everything else is crumbs off the table. Figure out those three areas and I’ll listen, otherwise it’s just codgers flapping their gums to have something to complain about.
That is not true for federal taxes the percentage of GDP has been drifting downward putting pressure on states and localities to make up the difference and creating $31 trillion in federal debt. The buying into complete lies has meant buying into complete mismanagement.
Meanwhile in the 1950s the percentage of all taxation was 15% roughly of the GDP. The entire period has far greater reinvestment by the private sectors. The major projects be they the highway system, military and later NASA all fitted into that neat package.
As taxes came down on the wealthy the entire thing unravelled.
This next chart is more telling of just what a total blunder supply side econ is. The promise was GDP growth. The promise was a simplified complete lie just cut taxes and everything will be better.
There are people who have done zero to make themselves literate on this topic making false statements all over the place. The confidence is a matter of how great a lie they have swallowed. There are elements in this nation that pay large amounts of money to find suckers. No Way! Way?
Really there are massive debt loads, for many abject poverty and 30k people per year dying as under or uninsured. It is called an utter failure.
Then there is how to do things…and some have no clue. Opinions with no clue do not count.
Relatively constant in this case is relative. A 5% swing doesn’t sound like a lot, but 5% of GDP is about $1.15 trillion. That’s quite a bit larger than either the defense budget or Medicare, and about the same amount as Social Security.
Double that from 10% to 20%. From the 50s into the mid 60s the federal budget was 10% roughly of the GDP.
You could say LBJ went wrong, but the pressure really came from JFK’s tax cut.
Also it is not just SS doubled, there is a major compounding effect in the mismanagement. A lot of that affect is seen as a sinkhole of poverty and early death for many individuals. The accounting columns never really accrue the costs.
Nope. Looking at the annual data from the St. Louis Fed (linked above) for the 15 years between 1951 and 1965 federal revenues varied from 14.9% up to 18.0% with an average of 16.6% of GDP.
The average for the last five years (2017-21) was also 16.6%. The average for the last 10 years was 16.7%.
The chart shows the corporate tax rates dropping. However, the percentage of federal revenues from corporate taxes has remained pretty steady over the last 40 years. In 2015 it was 10%. In 1980 it was 11%.
Social Security covers earned income. Pre-Reagan, 90% of total wages paid in the US economy was taxed under Social Security. Today, the total wages covered are 85% or less of total paid wages. Thus, Congress has failed to raise the amount taxed by Social Security–and it gets further behind every year.
Because of megar GDP growth. Taxes are more stable in the 1981 to 2020 period as you are stating. But that is a failure. We end up with $31 trillion in federal debt.
Until you begin to understand the dynamics in economics you are just spitting out what you saw in a chart. It is not comprehending the entire situation.
The promise was economic growth if taxes on the wealthy were low. You have been lied to entirely for the last 40 years.
Do you always believe any lie anyone wants to use on you?
