Category: News and Opinion

We Will Fight No More Forever

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Thomas Cahill explains in Sailing the Wine Dark-Sea that in classical times there was a tension between the Greeks and their Roman overlords with the Greeks embittered by their lower status when compared to the Romans who were of an inferior culture.  On the other hand the Romans, though proud of their status as conquerors, tried to sooth the Greeks by adopting their culture wholesale.  It was sort of like the dichotomy that exists between Americans and the French and other Europeans.

Historical Overview of Federal Revenues

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Prior to the Great Recession, I had heard federal politics described as little more than an ongoing argument about taxes; who pays too much, who pays too little, how much should be collected, how much can be collected. The data shows, however, that while there may be a big government-small government going on, however, that is only on the spending side. The generations now in charge have voted to pay for small government, aside from the peaks of economic bubble when corporate income and capital gains taxes are pouring in. The question is “who will get the small government that has been paid for?”

In fact, right at now the federal tax burden, as a share of the economy, is lower than it has been at any point in my working life – even though spending is higher. Federal taxes are far lower as a share of GDP than in the lowest year under President Reagan, by a wide margin. I can confirm this in my own life – our own total federal, state and local burden is much lower as a share of our income than in the early 1990s, when we had far less income, no dependents, and little in charitable deductions. Even though with regard to income taxes, we don’t benefit from the sweet deals the executive class gets on capital gains or retired government workers get on New York’s state and local income taxes. At the start of the Great Recession, I had expected tax burdens to soar as the federal government, state and local governments attempted to fend off bankruptcy. While state and local taxes have increased, federal taxes have fallen. The federal data may be found in the spreadsheet linked from this post. A discussion of how we got here follows.

Historical Overview of Federal Finances: Background

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There is no getting around it, 2012 is a federal election year. The bad news is because New York is not a swing state, we already know our votes for President will be nothing more than symbolic. Unless we are in swing districts, the same may be said of our votes for Congress. The good news is we will thus be spared the special interest-financed cavalcade of lies, distortions, and “culture war” irrelevancies that constitute political campaigns. You don’t have to know that much to be unable to listen to anything that any of them say without getting disgusted.

Without a meaningful vote, and unwilling to listen to the meaningless BS, I’ve decided to participate in the election by presenting some facts. Facts about how much money the federal government has taken in, and spent, by category, as a percent of its economy, during the recent epoch of political history. That epoch began with the election of Ronald Reagan as President, which ended an epoch that began with the election of FDR. With the Room Eight attachment function still dead, the site owners have posted an Excel spreadsheet, with a series of worksheets and tabbed on the bottom, at this location. The background required to understand it follows in the rest of this post; my view of what it means will follow thereafter.  Download the spreadsheet, print out the graphs and tables, and read on. 

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