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Old 04-18-2011, 09:13 AM
 
Location: Gulf Coast Texas
28,493 posts, read 15,453,012 times
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Here is an excel sheet from the White House that shows Federal Tax Receipts and Federal spending as a percentage of GDP.

Table 1.2—Summary of Receipts, Outlays, and Surpluses or Deficits (-) as Percentages of GDP: 1930–2016

Here's what to take from this...

1- Since 1940, taxes received as a percentage of GDP has remained between 15% and 20%. This is regardless of the tax rate - whether it's Carter's 70% rate or Reagan's 28% rate - it didn't matter. So when the economy is booming, there is more tax money coming in because the GDP is larger. When the economy shrinks, so does government income due to tax income. What this says is that taxing the rich won't matter in paying down the debt.

2- Note the Surplus or Deficit column. Two things to note.
a) The amount of negative years versus positive years.
b) The large jump post 2009.

What this says is that government is continuously spending beyond the money it receives. CONTINUOUSLY.

The solution to the debt and deficits is simple.
  • Government needs to spend within it's means.
  • Government needs to do what it can to boost the economy in order to increase the amount it receives - and then use extra money to pay down debt.
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Old 04-18-2011, 09:17 AM
 
Location: South Dakota
2,608 posts, read 1,793,578 times
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End the FED and restore THE RULE OF LAW....

Until that happens were just playing musical chairs....
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Old 04-18-2011, 09:17 AM
 
Location: Dallas, TX
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Federal Tax receipts have averaged 18% of the GDP over the decades... until the 2000s when it has steadily gone down from 20.6% of the GDP to 14.9% of the GDP (a whopping 5+ percent). There's a half trillion in deficit right there from reduced tax revenues.
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Old 04-18-2011, 09:30 AM
 
Location: Gulf Coast Texas
28,493 posts, read 15,453,012 times
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Quote:
Originally Posted by EinsteinsGhost View Post
Federal Tax receipts have averaged 18% of the GDP over the decades... until the 2000s when it has steadily gone down from 20.6% of the GDP to 14.9% of the GDP (a whopping 5+ percent). There's a half trillion in deficit right there from reduced tax revenues.
OK - what changed? The tax policy has remained the same for the last 10 years.
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Old 04-18-2011, 09:32 AM
 
Location: Dallas, TX
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Quote:
Originally Posted by DRob4JC View Post
OK - what changed? The tax policy has remained the same for the last 10 years.
And the tax policy, along with the rest of economic policies would have nothing to do with it?
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Old 04-18-2011, 09:36 AM
 
Location: Gulf Coast Texas
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Quote:
Originally Posted by EinsteinsGhost View Post
And the tax policy, along with the rest of economic policies would have nothing to do with it?
Nope - from the taxes part of the equation.
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Old 04-18-2011, 09:44 AM
 
Location: Gulf Coast Texas
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Here's the deal - especially with regards to the 2009-2010 numbers.

We have had artificial stimulus into the GDP numbers - i.e. QE1 and QE2 (quantitative easing). Look at the balloon in the outlay numbers for those two years.

So what happens is that the GDP is greater than it should be under normal circumstances because the government is adding stimulus. Therefore that 14.9% low number is because of the larger GDP amount. If there were no stimulus, the GDP would be smaller, and the taxable percentage would be more in line with the rest of the decade. But then Obama would take a hit because of the smaller GDP and the shrinking economy. He can't have that.
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Old 04-18-2011, 09:44 AM
 
Location: Dallas, TX
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Quote:
Originally Posted by DRob4JC View Post
Nope - from the taxes part of the equation.
If I were to ask you to provide a summary of economic policies that dictated pretty much all of 2000s leading us to the great recession that began in Dec 2007, what would you?

Quote:
Originally Posted by DRob4JC View Post
Here's the deal - especially with regards to the 2009-2010 numbers.

We have had artificial stimulus into the GDP numbers - i.e. QE1 and QE2 (quantitative easing). Look at the balloon in the outlay numbers for those two years.
I'm assuming you use the word "artificial" only when it is the government that is trying to prop up an economy that isn't being supported by the private enterprise anymore. Or, would you also apply it to the economy in the early 1940s when the government spending reached unprecedented levels and finally put to rest the anxiety of the Great Depression that preceded it by a decade?
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Old 04-18-2011, 09:52 AM
 
Location: Gulf Coast Texas
28,493 posts, read 15,453,012 times
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Quote:
Originally Posted by EinsteinsGhost View Post
If I were to ask you to provide a summary of economic policies that dictated pretty much all of 2000s leading us to the great recession that began in Dec 2007, what would you?


I'm assuming you use the word "artificial" only when it is the government that is trying to prop up an economy that isn't being supported by the private enterprise anymore. Or, would you also apply it to the economy in the early 1940s when the government spending reached unprecedented levels and finally put to rest the anxiety of the Great Depression that preceded it by a decade?
I don't understand what any of what you said has to do with fixing the problem.

Taxing the rich won't work. Government needs to spend within the money it receives. Government needs to pay down the debt. That's all.
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Old 04-18-2011, 10:00 AM
 
Location: Dallas, TX
31,777 posts, read 24,901,261 times
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Quote:
Originally Posted by DRob4JC View Post
I don't understand what any of what you said has to do with fixing the problem.

Taxing the rich won't work. Government needs to spend within the money it receives. Government needs to pay down the debt. That's all.
I try not to fix problems without recognizing root causes and having a decent understanding of them. And when proposing solutions, I also tend to favor including potential implications.

Considering that a continuous drop in tax revenue through out the 2000s is key to this thread, in any discussion involving debt and deficit, I think it is logical to understand economic and financial decisions made over the years. No? So, I ask again, how would you summarize the economic and financial decisions made by the government over last several years? You could help continue the discussion with some examples to elaborate your point. And I will gladly respond to any of your questions as a follow up.
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