<![CDATA[Federal Spending vs Revenue]]>The primary reason why we are running large sustained deficits today is because we are spending much more as a percentage of GDP than we have historically (excluding, perhaps, the peak of WWII).

Federalcurrentbudgetchart

source data from Federal Reserve Bank of St. Louis

Note:

 

1) Tax revenues have average about 18% of GDP since 50s and they’re not that different now (our current tax code is more reliant on the rich, so we see higher highs and lower lows during economic cycles).

2) Spending has clearly been on a consistent upward march.

 

Enough said.

 

 

]]>