This Wall Street Journal piece is a real kick in the gut. Problem is, the majority of Americans just voted as if it’s no big deal. For those who care, we added another $1.1 trillion to the deficit for the fiscal year ended September 30. In the piece, WSJ looks at the revenue and spending numbers.
Note, however, that federal spending remains at a new plateau of about $3.54 trillion, or some $800 billion more than the last pre-recession year of 2007. One way to think about this is that most of the $830 billion stimulus of 2009 has now become part of the federal budget baseline. The “emergency” spending of the stimulus has now become permanent, as we predicted it would.
When Beltway politicians claim they want a “balanced” approach to reducing the deficit, what they really mean is raising taxes to finance this new higher spending level. And the still-higher level that is coming with ObamaCare.
The reality is that the fastest way to raise revenue is with faster economic growth. To the extent that raising tax rates will reduce the rate of growth, it will slow the flow of tax revenue and increase the deficit.
Brace yourself for another four years of irresponsible decisions.
