DEAR DEMOCRATS: We Do Need To Talk About How Big You Want The Government To Be

Unfortunately, most of the talk from the Republicans on how we’re going to get our debt-and-deficit problem under control is crazy-talk.

The Republicans generally just want to slash government spending, even though federal tax rates and receipts are historically low (see chart below).

Most non-partisan economists, meanwhile, agree that the only sane way to close the budget deficit and stop piling on debt is to both trim spending AND raise taxes, not one or the other.

But this doesn’t let the Democrats off the hook.

The question the Democrats need to answer is how big they want the government to be, really.

And they need to acknowledge that government spending is, right now, pretty much at an all-time high.

As the chart below shows, federal government expenditures are now running at about 24% of GDP. That’s down a point from the peak of the stimulus and war spending of the past couple of years, but it’s still vastly higher than all previous history. And unless significant changes are made to Medicare, et al, that spending will only climb in the coming years.

Government Spending As A per cent Of GDPFederal government spending as a percentage of GDP. Near an all-time high…

Photo: St. Louis Fed

So that leads us again to the big question the Democrats need to answer:

In your ideal universe, how much of the country’s GDP will the federal government spend?

The current amount? (24%)

Much more than the current amount? (30%?)

Less than the current amount? (20%?)

The answer will dictate not only your answer to the debt and deficit problem, but your answer as to how much spending we need to cut (if any) and how much we need to raise taxes.

Pretending that you have some grand vision for the country without answering this question is disingenuous and irresponsible.

We’d all like to have everything we want and never have to worry about how much it costs. But we’re already spending a boatload more than we’ve ever spent, and we’re slowly going bankrupt. So that’s not a plan.

So, we ask this simple question of the Democrats:

How much of our GDP do you want the federal government to spend?

While you’re mulling that over, here are a few more charts for your consideration:

FEDERAL TAX RECEIPTS AS A per cent OF GDP: (Historically low).

Federal Government Tax Receipts as a per cent of GDP

Photo: St. Louis Fed


Federal Budget Deficit

Photo: St. Louis Fed

FEDERAL DEBT AS A per cent OF GDP (Huge and growing):

Federal debt as a per cent of GDP

Photo: St. Louis Fed

SEE ALSO: THE TRUTH ABOUT TAXES: Here’s How Low Today’s Really Are

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