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There is no question that if you look at this year’s federal spending of 25.3 percent of GDP, it looks high, relative to recent American history.
But, given today’s struggling economy and the projections for federal spending to stabilize and come down — assuming the economy recovers — it should be clear the United States doesn’t face an immediate spending crisis.
The nation does, however, face a revenue crisis.
Largely because of George W. Bush’s tax cuts, which he justified by noting that the government was running a surplus in 2000, federal revenues have dropped from 20.35 percent of GDP in the last year of the Clinton administration to 14.41 percent today.
So, no matter what spending programs get cut – even if spending were rolled back to around 21 percent of GDP, in line with the levels of spending under recent Republican administrations – the United States won’t stanch the flood of red ink without getting revenue up to about the same share of GDP.
http://consortiumnews.com/2011/07/29/the-big-fat-gop-budget-lie/
But, given today’s struggling economy and the projections for federal spending to stabilize and come down — assuming the economy recovers — it should be clear the United States doesn’t face an immediate spending crisis.
The nation does, however, face a revenue crisis.
Largely because of George W. Bush’s tax cuts, which he justified by noting that the government was running a surplus in 2000, federal revenues have dropped from 20.35 percent of GDP in the last year of the Clinton administration to 14.41 percent today.
So, no matter what spending programs get cut – even if spending were rolled back to around 21 percent of GDP, in line with the levels of spending under recent Republican administrations – the United States won’t stanch the flood of red ink without getting revenue up to about the same share of GDP.
http://consortiumnews.com/2011/07/29/the-big-fat-gop-budget-lie/