The budget impasse raises comparable questions. Can we resolve it before some ill-defined crisis imposes its own terms? For years, there has been a "something for nothing" aspect to our politics. More people became dependent on government. From 1960 to 2010, the share of federal spending going for "payments to individuals" (Social Security, food stamps, Medicare and the like) climbed from 26 percent to 66 percent. Meanwhile, the tax burden barely budged. In 1960, federal taxes were 17.8 percent of national income (gross domestic product). In 2007, they were 18.5 percent of GDP.This good fortune reflected falling military spending -- from 52 percent of federal outlays in 1960 to 20 percent today -- and solid economic growth that produced ample tax revenues. Generally modest budget deficits bridged any gap. But now this favorable arithmetic has collapsed under the weight of slower economic growth (even after a recovery from the recession), an aging population (increasing the number of recipients) and high health costs (already 26 percent of federal spending). Present and prospective deficits are gargantuan.
Samuelson's static comparative analysis of the economy since 1960 to present fails to mention the growth of the welfare state and the consequent devotion of economic resources to satisfy that growth. While the tax burden as a percentage of the GDP may indeed have barely grown since 1960, personal incomes have probably doubled or more in constant dollars since that starting point meaning the government burden on the economy is much greater now than then. Furthermore there was no Medicare, EPA, Departments of Energy, Education, et al, commanding tax resources but more importantly creating thousands upon thousands of regulations the hidden costs of which easily match the direct tax burden on the economy.
Samuelson's equal blame allocation to both parties is also less than accurate:
Liberals still want more spending, conservatives more tax cuts. (Although the tax burden has stayed steady, various "cuts" have offset projected increases and shifted the burden.) With a few exceptions, Democrats and Republicans haven't embraced detailed take away policies to reconcile Americans' appetite for government benefits with their distaste for taxes. President Obama has provided no leadership. Aside from Rep. Paul Ryan, chairman of the House Budget Committee, few Republicans have.Au contraire, republicans have proposed many plans to limit the size and growth of government for many years including wholesale elimination of wasteful and useless departments, revision of the tax code to promote economic growth, and others. Meanwhile democrats have blocked all these efforts and promoted other plans such as the CRA which have led directly to the crises we now face. Placing blame on both parties is fair up to a point, but on net, republicans have offered many plans for restraining government growth and beyond that of Paul Ryan's aimed largely at the train wreck called Obamacare.
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