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Sound-off
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- Posted March 7, 2013 by
- CKThompson Follow
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Tax vs Spend 101 : A Brief Look at the Historical Data
In the hopes of eventually being able to develop a factual groundwork for a long term philosophical strategy for attacking the debt, I have spent a lot of time recently analyzing some of the data behind the budget deficits and the national debt. This data is simply that, data. It is meant to establish a strategic frame of reference, not to provide a tactical level explanation for what decisions have led to the observed results.
Note: All of the values I discuss are in terms of a percentage of GDP which, in terms of the budget, is more accurate to use when comparing data across various years.
Historical Data
According to the CBO, since 1972…
Average revenue is 18% and average federal expenditures are 21%, resulting in an average deficit of 3%. The total debt has climbed from $322B to over $16T, a 5,000% increase.
http://www.cbo.gov/publication/42911
Since 2008
While the recession has had a significant negative impact on tax receipts since 2008, spending under the current administration has increased significantly. Revenues are down to about 16% while spending has jumped to around 24%...a historically high average deficit of 9%. In 2009 the deficit set a record high by exceeding $1T.
According to data from the Whitehouse, here are numbers for the current fiscal year.
GDP: $15T
Debt: $16.7T (113% of GDP)
Projected Receipts: 18%
Projected Outlays: 23%
Projected Deficit: 5% ($900B)
http://www.whitehouse.gov/sites/default/files/omb/budget/fy2013/assets/tables.pdf
Conclusions
Since 1972, spending has outpaced a fairly constant tax revenue stream at a rate of about 3% of GDP each year. While there were variations during that time period, the variations tended to be relatively small and the trend line fairly flat. Since 2008, that deficit has jumped as high as 9% and has averaged about double the historic norm.
Stay tunes for Tax vs Spend 102 : Marginal vs Effective Tax Rates and Their Efect on Revenue
Note: All of the values I discuss are in terms of a percentage of GDP which, in terms of the budget, is more accurate to use when comparing data across various years.
Historical Data
According to the CBO, since 1972…
Average revenue is 18% and average federal expenditures are 21%, resulting in an average deficit of 3%. The total debt has climbed from $322B to over $16T, a 5,000% increase.
http://www.cbo.gov/publication/42911
Since 2008
While the recession has had a significant negative impact on tax receipts since 2008, spending under the current administration has increased significantly. Revenues are down to about 16% while spending has jumped to around 24%...a historically high average deficit of 9%. In 2009 the deficit set a record high by exceeding $1T.
According to data from the Whitehouse, here are numbers for the current fiscal year.
GDP: $15T
Debt: $16.7T (113% of GDP)
Projected Receipts: 18%
Projected Outlays: 23%
Projected Deficit: 5% ($900B)
http://www.whitehouse.gov/sites/default/files/omb/budget/fy2013/assets/tables.pdf
Conclusions
Since 1972, spending has outpaced a fairly constant tax revenue stream at a rate of about 3% of GDP each year. While there were variations during that time period, the variations tended to be relatively small and the trend line fairly flat. Since 2008, that deficit has jumped as high as 9% and has averaged about double the historic norm.
Stay tunes for Tax vs Spend 102 : Marginal vs Effective Tax Rates and Their Efect on Revenue
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