I thank David Treppendahl (“Supply Side doesn’t supply,” Nov. 20) for introducing me to a very informative website (http://www.taxpolicycenter.org/taxfacts/displayafact). He uses that website to show that revenues during President Barack Obama’s first term were lower than historical averages (15.4 percent of GDP during his first term versus the historical average of around 18 percent). His emphasis: low tax rates are the main reason we have a big deficit.
Perhaps some people should be taxed more, and almost certainly our tax code should be overhauled, but one could also argue that tax revenues should decrease during a recession. Similarly, one might expect some belt tightening of government during a recession, but no such luck. Federal government spending increased substantially from historical averages of 20 percent of GDP to around 24.4 percent of GDP during Obama’s first term. If government spending had not increased, our deficit would have grown at a rate only slightly higher than historical norms over the last 30 years.
Which leads me to the following question: What’s so wrong with the government spending too much? A big problem we “spending alarmists” have is that while some don’t have jobs, it is true that for many people things still seem eerily OK. We are told that the federal government borrows $1 trillion per year, and instinctively it may sound bad, but there don’t seem to be real consequences. How about this: Every year that the government borrows $1 trillion (like it did for each of the last four years), the average debt for each person in the United States increases by $3,000. So, the total average increased debt over the last four years for a family of four is $48,000. Half those families won’t contribute to paying off the debt, so the increased debt for those that will is closer to $100,000. That family of four helping pay for government often already has debt obligations (car note, house note, taxes to pay for already-existing government debt, education costs, business-related costs, etc.)
The note on an additional $100,000 means less money will be available to build a business, invest in education or go on a trip. That extra $100,000 of debt represents an erosion in the future quality of life.
If you went to the voting booth a few weeks ago not realizing the consequences of the debt increase you and your children will need to repay, you were voting without a clear picture of what is going on. But it seems to be an “I’ll get mine while it lasts” country these days and I’m not sure any explanation of the seriousness of excessive debt would sway too many. Makes me sad.