Originally Posted by laurence
Help me out here. Govt. spending is 45% of GDP, but tax reciepts is only 14.8%? So the 30% gap is just borrowing? Is this saying 30% of our GDP is debt driven? I'm missing something here.
That's because the spending chart is wrong.** The actual numbers from the president's budget are here
What it shows is that spending in 2010 is 25.4% of GDP, the highest levels since 1945.
So we have tax receipts that are the lowest as a % of GDP since 1950 and spending at its highest since 1945. An objective observer would conclude that taxes need to be raised and spending needs to be reduced. Partisans pushing an agenda different than balancing the budget will conclude otherwise.
After about 10 seconds of investigation into the source of the chart it turns out that what is being shown is an estimate of all government spending, including state and local. That isn't exactly what you want to use when discussing the federal
budget deficit. Here's the same chart showing only Federal spending as a % of GDP, which has been more stable since ~1950 (and this tracks neatly with the data provided in the link above).
And here's what tax revenue looks like according to the budget . . .