taxedout said:
Tax revenues compose the minority of government spending.
Taxes would be need to be more than doubled to keep up with the spending.
The majority of the spending is done with "freshly printed" dollars courtesy of the Federal Reserve. These dollars have no intrinsic value. You and I will pay the price eventually in the form of the hidden tax of inflation. This is how politicians raise our taxes daily without even informing us.
Tax revenues have nothing to do with spending. Revenues are what the govt takes in thru taxes, spending is what it pays out. When it spends more than it takes in, you have a deficit.
In 2005, the Govt had revenues of $2,159 billion and spent $2,472 billion, leaving a total deficit of $318 billion. That includes SS revenues and expenditures, if you take that out of the mix the operating deficit was $493 billion, and, actually, the official budget does not include some off the books expenditures, so the Govt had to borrow $553 billion in FY 2005, the more accurate measure of its deficit. To avoid operating deficit spending, taxes would have to be increased $553 billion from 2,472 billion, or about 20%.
The Govt does not spend newly printed money. The Govt does not print money or control the money supply (thank God); that is the function of the Fed. When the Govt spends more than it takes in, it has to borrow the difference, like everyone else. It borrowed $553 last year. It has had to borrow about $2.5 trillion since 2000 because it has spent that much more than it took in (excluding SS).
You and I are already paying the price. Last year the interest on the debt was $352 billion. Of that, some was for debt owed to Govt trust accounts, like the SS fund, but over $200 billion in interest was paid to public debt holders, the biggest of whom include our good friends Japan, China, and Saudi Arabia. The total interest expense in the first 5 months of FY2006 is $174 billion.
As the debt continues to increase thanks to irresponsible (immoral, IMO) fiscal policy, you and I will pay a greater price as the interest expense increases, making less money available to pay for other things, or requiring ever more debt.
This debt, if it is not checked, will pose a huge burden on the next generation, who will already have the costs of the baby boomers retirement and medical expenses. Instead of helping the next generation by giving them a strong, debt free America, our Republican leaders over the past 25 years have given us tax cuts (or more accurately, deferrments), mistaken wars, and new spending programs, and have passed the buck of the costs of these programs to the next generation through massive amounts of debt (which has grown from $1 trillion in 1980 to $8.2 trillion today).
We are the pass the buck generation. Thanks Ron George and George.