Big Gubmint
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Like a herd of affrighted ostriches, voters and elected leaders alike are ducking the expanding gap between Americans' desire for more and more Big Gubmint services and their unwillingness to pay for them.
The tension, to some degree, has been deferred by today's economy, which has caused all kinds of Big Gubmint emergency 'stimulus' programs to get the green light, funded by borrowed money.
A report from the Congressional Budget Office (CBO) entitled "The Long-Term Budget Outlook" makes interesting reading.
The way to measure the size of Big Gubmint is to compare the federal budget to the gross domestic product (GDP).
Since WWII, federal spending has averaged about 20 percent of GDP, federal taxes about 18 percent of GDP, and the budget deficit 2 percent of GDP.
The CBO's projection for 2020, which assumes the economy will eventually return to "full employment", puts spending at 26 percent of GDP, taxes at a bit less than 19 percent of GDP, and a deficit exceeding 7 percent of GDP.
Future spending and deficit figures will continue to grow.
What this means is that balancing the budget by 2020 will require a tax increase of almost 50 percent from average established in the past 5 decades. Remember, average was 18 percent of GDP. To get from there to 26 percent of GDP (spending in 2020) would require another 8 percent of GDP in taxes.
In today's dollars, that would be about $1.1 trillion, a 44 percent annual tax increase.
Even these figures may be unrealistic, because CBO's projections for defense and "non-defense discretionary" spending may be low. This last category covers much of what Big Gubmint does: environmental regulation, aid to education, highway construction, law enforcement, "homeland security".
Whatever the case, the major causes of the budget blowout are well-known: an aging population and rapid increases in health spending.
In 2000, Social Security, Medicare and Medicaid, the entitlements providing income and health care for the 65 and over population, totaled nearly 8 percent of GDP.
By 2020, CBO projects that will reach almost 12 percent of GDP.
Everyone favors benefits and opposes taxes.
Republicans want to cut taxes without cutting spending.
Democrats want to increase spending without increasing taxes, except on the rich.
The difference between the parties is practically nil.
Hardly anyone asks which programs are expendable and what additional taxes might cover remaining deficits.
What has sustained the status quo was a beneficient combination of decreased defense spending and modest, deficits.
As defense spending declined from 9 percent of GDP in the 60s to 3 percent by 2000, social spending rose, without requiring big tax increases. Running deficits provided extra leeway.
Now these expedients are exhausted. Deficits have risen; defense spending cannot decrease indefinitely.
There is zero political will to avoid spending and less to raise taxes, so we face much bigger and more costly Big Gubmint without the tax base to support it.
The tension, to some degree, has been deferred by today's economy, which has caused all kinds of Big Gubmint emergency 'stimulus' programs to get the green light, funded by borrowed money.
A report from the Congressional Budget Office (CBO) entitled "The Long-Term Budget Outlook" makes interesting reading.
The way to measure the size of Big Gubmint is to compare the federal budget to the gross domestic product (GDP).
Since WWII, federal spending has averaged about 20 percent of GDP, federal taxes about 18 percent of GDP, and the budget deficit 2 percent of GDP.
The CBO's projection for 2020, which assumes the economy will eventually return to "full employment", puts spending at 26 percent of GDP, taxes at a bit less than 19 percent of GDP, and a deficit exceeding 7 percent of GDP.
Future spending and deficit figures will continue to grow.
What this means is that balancing the budget by 2020 will require a tax increase of almost 50 percent from average established in the past 5 decades. Remember, average was 18 percent of GDP. To get from there to 26 percent of GDP (spending in 2020) would require another 8 percent of GDP in taxes.
In today's dollars, that would be about $1.1 trillion, a 44 percent annual tax increase.
Even these figures may be unrealistic, because CBO's projections for defense and "non-defense discretionary" spending may be low. This last category covers much of what Big Gubmint does: environmental regulation, aid to education, highway construction, law enforcement, "homeland security".
Whatever the case, the major causes of the budget blowout are well-known: an aging population and rapid increases in health spending.
In 2000, Social Security, Medicare and Medicaid, the entitlements providing income and health care for the 65 and over population, totaled nearly 8 percent of GDP.
By 2020, CBO projects that will reach almost 12 percent of GDP.
Everyone favors benefits and opposes taxes.
Republicans want to cut taxes without cutting spending.
Democrats want to increase spending without increasing taxes, except on the rich.
The difference between the parties is practically nil.
Hardly anyone asks which programs are expendable and what additional taxes might cover remaining deficits.
What has sustained the status quo was a beneficient combination of decreased defense spending and modest, deficits.
As defense spending declined from 9 percent of GDP in the 60s to 3 percent by 2000, social spending rose, without requiring big tax increases. Running deficits provided extra leeway.
Now these expedients are exhausted. Deficits have risen; defense spending cannot decrease indefinitely.
There is zero political will to avoid spending and less to raise taxes, so we face much bigger and more costly Big Gubmint without the tax base to support it.