Tuesday, August 23, 2011

Rant: Feds - cut spending NOW

Federal revenue never exceeds 20% of GDP. We’re over 18% now. Doesn’t matter who you squeeze how, the feds aren’t getting more than about another 1% GDP - which is about $140B, nowhere near “enough”.

Given that, the next obvious thought is to raise GDP. Start with the fact that GDP fell for the first time in ‘09, then consider that for ~15 years before that it rose at $500B/yr. At this point, just getting back to normal growth would be a remarkable accomplishment - and would net another $100B/yr annual growth in revenue, again nowhere near enough. Outer-limits SWAG is doubling long-term GDP growth, growing revenue by a still-inadequate $200B instead.

So squeezing hard and stimulating fast, while munching skittles falling from rainbows whilst perched on a unicorn’s back, the best we could Hope(TM) for is $340B new revenue. Meh.

Washington is spending $1500B more of our money than they're getting. For the most optimistic schemes offered, they'll still spend over a trillion dollars more than there is to, putting us and our children on the hook for not just paying off tens (hundreds?) of trillions of dollars, but making our kids pay the interest bill as well with money they'll need for other things and no reason to pay for our folly.

That leaves...50% across-the-board spending cuts.

Stock up & hunker down, this ain’t gonna be pretty.

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