3 October 2013

In spite of reports to the contrary, the sky's still up there.

Badtux the Snarky Penguin has an excellent post that provides some needed context for the latest Republican concern over the sky falling:

A common thing I hear is that “we’re broke”. Except the numbers don’t say that. The U.S. is the least-taxed major economy on the planet. During the horror of peace and prosperity that was the Clinton Administration taxation reached 29% of the economy, today it is at 26.9% of the economy. The OECD average is 35%. The deficit for the last fiscal year is estimated to be at 4% of GDP, so we could eliminate the deficit by raising taxes to 30.9% of GDP. That would still be lower taxes than every Western nation including all of Europe, Australia, and New Zealand, and lower than Japan if you use comparable figures, though slightly higher than South Korea. And we already know how to raise taxes to 30.9% of the GDP: just eliminate the tax loopholes that allow millionaires like Mitt Romney to pay only 15% of their income as taxes when you and I pay 30% or more of our income as taxes (if you count all taxes, including sales taxes, state taxes, property taxes, and Social Security/Medicare taxes).
As for the notion of the accumulated deficit being too high, the accumulated deficit currently stands at around 100% GDP. As in, if we paid off the entire accumulated deficit over the next 30 years similar to the way you’d pay off the mortgage on a house, we’d have to raise taxes roughly by 3.3% of GDP to do it, and we’d *still* be less taxed than the OECD average. Of course, there’s no real reason to do so since current Treasury bond offerings are going for 0% effective interest. As long as people are willing to let us use their money for nothing, why pay it back?
In other words, the notion that the United States is “broke” is utter nonsense. The numbers simply don’t support such a statement. The numbers are the numbers (and BTW, I got most of those numbers from the right-wing Heritage Foundation’s web site, so don’t claim the numbers aren’t the numbers).

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