Actually, Republicans, We DO Have A Revenue Problem

Earlier, I wondered why, if the Republicans are suddenly so concerned about the country’s debt and deficit problem, they also want to delay or eliminate the medical-device tax.

Eliminating this tax, after all, will balloon our deficit and debt by $US30 billion over 10 years — exactly the opposite of what the Republicans say they want.

After publishing this question, I got an immediate (and common) response on Twitter:

“Because we have a spending problem, not a revenue problem.”

Now, there may be some good reasons to eliminate the medical-device tax, but this is not one of them.

Why not?

Because we actually DO have a revenue problem.

Let’s go to the chart…

The first chart, from the St. Louis Fed, shows federal revenue as a per cent of GDP. As you can see, it is currently only 16.5% of GDP, well below the 18% average since 1980, and even farther below the peak of about 20%.

Federal Spending as a Per cent Of GDPBusiness Insider, St. Louis FedFederal revenue as a per cent of GDP.

It may be that some Republicans want taxes to be even lower than 16.5% of GDP. That’s fine. But that does not mean that we have a “spending problem, not a revenue problem.” As the chart above shows, we very clearly have a revenue problem.

Of course, we also do have a “spending problem,” at least relative to the same average. As the chart below shows, our federal spending is currently about 23% of GDP, versus an average of about 21% since 1980.

Federal spending as a per cent of GDPBusiness Insider, St. Louis FedFederal spending as a per cent of GDP.

So, yes, if you regard this year’s deficit as bad, spending is a “problem.”

But so is revenue!

SEE ALSO: Now That We’re Talking About Debt And Deficits Again, Here Are The Facts…

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