Thursday, November 11, 2010

Useful charts for deficit reduction debates

Here I get both federal receipts and federal expenses as a percentage of GDP.  Revenue obeys Hauser's Law and rarely goes out of bounds, garnering 21% of GDP has rarely been done.  Count on 19%, that's it, good luck. If you ever want to get a deficit, the only way to do that is raise federal spending relative to GDP, which we quite often and recently.  Note the taxpayer system has contracted, and we will stay contracted until we find a growth engine, so do not expect more than 14% of GDP in revenue for a few years.

Also note how the federal system has been way fucked up since 1980, it is now more unstable, not less, the deficit gyrations more intense.

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