Seems to me that the Bush tax cuts and war spending is what largely got us into trouble. If we had kept revenues/taxes at their previous rates (maybe even raised rates in order to make up for the additional costs associated with the wars), we would not have had such large deficits. Without such large deficits, we wouldn’t have had to borrow so much money. Without having to borrow so much money, we wouldn’t have such a large debt service burden.
You’re right about interest rates having the potential to blow us out of the water. I just think that in the absence of the Bush tax cuts and wars, we would be in a much better place today. It’s not always about “spending,” but about making sure that revenues match (or exceed) spending. It really is that simple.[/quote]
Let’s look at the data and see. Straight from the IRS web site http://www.irs.gov/uac/SOI-Tax-Stats-Individual-Income-Tax-Rates-and-Tax-Shares. In 2000 which was before the bush tax cuts and the best year for tax collections in terms of total percentage collected vs total income you have income of 6.423 trillion and total taxes of $980 billion for a 15.2% rate. In 2010 which is the most recent data you have 8.039 trillion and $949 billion in taxes for a 11.8% rate. If we use the 15.2% against the 8.039 trillion number we get $1.22 trillion so a increase of roughly $300 billion in taxes.
What was our deficit last year again? Oh that’s right 1.3 trillion Looks like tax increase are only going to solve about 25% of our problem we still need to cut $1 trillion. Cut military you say which I completely agree with in half $900 to $450 billion and I still have another $550 billion to cut from medicare, medicaid, welfare or social security.
When you look at total wages and total spending you quickly realize it’s a spending problem not a revenue problem. I can agree to increasing revenue but you need to cut probably $3-4 dollars in spending for every new dollar of revenue to realistically balance the budget and that means government services like medicare have to be reduced in cost. How you make that reduction is debatable, but it must and will happen.
