2009 August 10 Monday
Biggest US Tax Revenue Decline Since 1930s
The economic downturn has shrunk tax revenues to an extent not seen since 1932.
Other figures in an Associated Press analysis underscore the recession's impact: Individual income tax receipts are down 22 percent from a year ago. Corporate income taxes are down 57 percent. Social Security tax receipts could drop for only the second time since 1940, and Medicare taxes are on pace to drop for only the third time ever.
Partly this is a reflection of the extent to which The Upper Class Funds The US Government. Incomes are more volatile for those at higher income levels. Therefore the revenues from income taxes have become more volatile as economic inequality has grown.
The Democratic Congress is on a spending bender.
The national debt already exceeds $11 trillion. And bills just completed by the House would boost domestic agencies' spending by 11 percent in 2010 and military spending by 4 percent.
The recession basically gave the Democrats an excuse to spend on things they wanted to spend on anyway. Where does this lead? See my post: Odds Of Eventual US Sovereign Debt Default?
Personally, I blame all those dumb-assed protectionists and their stpid trade restrictions - you know just like Smoot-hawley in the 1930s.
Don't all tose fools know that free-trde always enriches us?
(Of course this is to be read satirically).
The upper class funds the government to a slightly smaller extent than it owns the economy so I am not quite sure I buy that one. If we had a flat tax the % funind of the US government by the wealthiest would look very similar than it does.
I think the biggest issue is that the US economy is now almost 50% government and I think it quite clear this is playing a role in how inefficient our nation's economy is becoming.
If 0% government control of the economy is some mythical absolute free market system and 100% government control is communism, we have nearly reach the perfect midpoint.
No, the US government is not almost 50% of GDP. You know, it isn't that hard to do a web search to come up with the correct answer. Granted, that is not as easy as just spewing whatever you like to say. But it is more accurate.
But I'll make it easy for your lazy self: Odds Of Eventual US Sovereign Debt Default?. Click thru on the article in that post. Search for 28. See how it represents state and federal spending as a percentage of GDP.
Indebtedness discussions often don't include state and municipal debt. 48 out of 50 states currently run deficits, and who knows what their overall combined indebtedness is? The largest cities in California are all running huge deficits of 400 million dollars-plus; this is independent of the state's indebtedness. I would imagine that if you factor in state and municipal indebtedness with federal indebtedness, the level of debt we are carrying as a nation is even more terrifying.
The picture gets even worse when we consider unfunded liabilities. These are like bills that haven't come due yet. These unfunded liabilities are the real killer.
Plus, I expect Peak Oil and declining demographics to stop and reverse economic growth. The economic growth that was projected to pay for some of the unfunded liabilities isn't going to happen. Combine that with the retirement of the baby boomers and the nation's fiscal condition becomes a disaster.
I'm planning on working till I'm 70 at least. I expect higher taxes and less old age entitlements than the current retirees are getting.
I'm planning on working till I'm 70 at least.
I am also. They won't let us whiteys get off so easily, as even at 70, we will be expected to carry the water for the much-younger NAMs. I sometimes in cynical moments wonder if that's the idea behind the big push toward age-extending scientific research: keep the old whities alive and producing tax dollars for a few more years, to keep the Ponzi schemes going for few more years.