Posts Tagged ‘federal budget’

Actual U.S. Debt Exceeds GDP Of Entire Planet

April 11, 2011

Here’s one for you to put in your pipe to smoke on.  Even if the U.S. were to seize the wealth of the entire planet, and even if we taxed all the wealth of not only the rich but the miserably poor as well, we STILL couldn’t pay off the debts that Democrats demand that we keep adding to until after we’ve reached that “straw that broke the camel’s back” point:

True U.S. debt exceeds world GDP by $14 trillion
Obama 2010 budget deficit now 5 times larger than nation’s output
Posted: March 21, 2011
By Jerome R. Corsi

As the Obama administration prepares to finance a Fiscal Year 2011 budget  deficit expected to top $1.6 trillion, the American public is largely unaware that the true negative net worth of the federal government reached $76.3 trillion last year.

That figure was five times the 2010 gross domestic product of the United States and exceeded the estimated gross domestic product for the world by approximately $14.4 trillion.

According to the U.S. Department of Commerce Bureau of Economic Analysis, U.S. GDP for 2010 was $14.861 trillion. World GDP in 2010, according to the International Monetary Fund, was $61.936 trillion.

“As government obligations continue to spiral out of control and the U.S. government shows no willingness to make the magnitude of spending cuts required to return to fiscal responsible, the U.S. economy is headed to a great collapse coming in the form of a hyper-inflationary great depression,” says economist John Williams, author of the website Government Shadow Statistics.

Statistics generated in Williams’ most recent newsletter demonstrate the real 2010 federal budget deficit was $5.3 trillion, not the $1.3 trillion previously reported by the Congressional Budget Office, according to the 2010 Financial Report of the United States Government as released by the U.S. Department of Treasury Feb. 26, 2010.

The difference between the $1.3 trillion “official” 2010 federal budget  deficit numbers and the $5.3 trillion budget deficit based on data reported in  the 2010 Financial Report of the United States Government is that the official  budget deficit is calculated on a cash basis, where all tax receipts, including  Social Security tax receipts, are used to pay government liabilities as they  occur.

The calculations in the 2010 Financial Report are calculated on a GAAP basis  (Generally Accepted Accounting Principles) that includes year-for-year changes  in the net present value of unfunded liabilities in social insurance programs  such as Social Security and Medicare.

Under cash accounting, the government makes no provision for future Social  Security and Medicare benefits in the year in which those benefits accrue.

“The broad GAAP-based federal deficits, including the Social Security and  Medicare unfunded liabilities, have been in the $4 trillion to $5 trillion range  in 2008 and 2009, and 2010’s deficit again likely was near $5 trillion,  remaining both uncontrollable and unsustainable,” Williams wrote.

“The federal government cannot cover such an annual shortfall by raising  taxes, as there are not enough untaxed wages and salaries or corporate profits  to do so,” he warned.

In his analysis of the 2010 Financial Report of the United States, Williams  listed both an official accounting and an alternative.

“The estimate of a broad 2010 GAAP-based deficit at $5 trillion is mine,” he  noted. “At issue with the published report, consistent year-to-year accounting  was not shown, with a large, one time reduction in reported 2010 Medicare  liabilities, based on overly optimistic assumptions of the impact from recently  enacted health care legislation.”


U.S. Government GAAP Accounting  Federal Budget Deficits U.S. Treasury, Financial Report of the United States,  2002-2010 (John Williams, Shadow Government Statistics, ShadowStats.com)

Williams argues the total U.S. obligations, including Social Security and  Medicare benefits to be paid in the future, have effectively placed the U.S.  government in bankruptcy, even before we take  into consideration any future and continuing social welfare obligations that may  be embedded within the Obama administration’s planned massive overhaul of health  care.

“The government cannot raise taxes high enough to bring the budget into  balance,” Williams said. “You could tax 100 percent of everyone’s income and 100  percent of corporate profits and the U.S. government would still be showing a  federal budget deficit on a GAAP accounting basis.”

Williams argues the U.S. government has condemned the U.S. dollar to “a  hyperinflationary grave” by taking on debt  obligations that will never be covered by raising taxes and/or by severely  slashing government spending that has become politically untouchable.

“Bankrupt sovereign states most commonly use the currency printing press as a  solution to not having enough money to cover  obligations,” he cautioned. “The U.S. government and the Federal Reserve have  committed the system to its ultimate insolvency, through the easy politics of a  bottomless pocketbook, the servicing of big-moneyed special interests, gross  mismanagement, and a deliberate and ongoing effort to debase the U.S. currency.”

He is concerned that the Federal Reserve will supplement its current policy  of Quantitative Easing 2, or QE2, under which the Fed intends to purchase by  mid-year 2010 another $600 billion of Treasury debt with “QE3.”

“These actions (QE2 and QE3) should pummel heavily the U.S. dollar’s exchange  rate against other major currencies,” he concludes. “Looming with uncertain  timing is a panicked dollar dumping and dumping of dollar-denominated paper  assets, which remains the most likely event as a proximal trigger for the onset  of hyperinflation in the near-term.”

Williams predicts that the early stages of hyperinflation will be marked by  an accelerating upturn in consumer prices, a pattern that has already begun to  unfold in response to QE2.

“For those living in the United States, long-range strategies should look to  assure safety and survival, which from a financial standpoint means preserving  wealth and assets,” he advises.

Williams suggests that physical gold in the form of sovereign coins priced  near bullion prices remains the primary hedge in terms of preserving the  purchasing power of the dollar, as well as stronger major currencies such as the  Swiss franc, the Canadian dollar and the Australian dollar.

And as totally insane as that is, it might well even be worse than that.

$61.936 trillion sounds like a lot.  And that’s the official figure for the International Monetary Fund’s estimate for U.S. indebtedness.  But the IMF is giving credibility to a figure that makes that $62 trillion seem almost manageable:

I Can Give You 200 Trillion Reasons Why We Need To Cut Government Spending NOW
By Michael Eden     March 7, 2011

Republicans are trying to get our spending under control, and Democrats are demonizing them every single step of the way.  Because Democrats are demons, and demonizing is the only thing they know how to do.

For the record, Republicans are trying to cut an amount which is basically 1/30th of Obama’s budget deficit.

News from globeandmail.com
The scary real U.S. government debt
Wednesday, October 27, 2010

NEIL REYNOLDS

Ottawa — reynolds.globe@gmail.com

Boston University economist Laurence Kotlikoff says U.S. government debt is not $13.5-trillion (U.S.), which is 60 per cent of current gross domestic product, as global investors and American taxpayers think, but rather 14-fold higher: $200-trillion – 840 per cent of current GDP. “Let’s get real,” Prof. Kotlikoff says. “The U.S. is bankrupt.”

Writing in the September issue of Finance and Development, a journal of the International Monetary Fund, Prof. Kotlikoff says the IMF itself has quietly confirmed that the U.S. is in terrible fiscal trouble – far worse than the Washington-based lender of last resort has previously acknowledged. “The U.S. fiscal gap is huge,” the IMF asserted in a June report. “Closing the fiscal gap requires a permanent annual fiscal adjustment equal to about 14 per cent of U.S. GDP.”

This sum is equal to all current U.S. federal taxes combined. The consequences of the IMF’s fiscal fix, a doubling of federal taxes in perpetuity, would be appalling – and possibly worse than appalling.

Prof. Kotlikoff says: “The IMF is saying that, to close this fiscal gap [by taxation], would require an immediate and permanent doubling of our personal income taxes, our corporate taxes and all other federal taxes.

“America’s fiscal gap is enormous – so massive that closing it appears impossible without immediate and radical reforms to its health care, tax and Social Security systems – as well as military and other discretionary spending cuts.”

He cites earlier calculations by the Congressional Budget Office (CBO) that concluded that the United States would need to increase tax revenue by 12 percentage points of GDP to bring revenue into line with spending commitments. But the CBO calculations assumed that the growth of government programs (including Medicare) would be cut by one-third in the short term and by two-thirds in the long term. This assumption, Prof. Kotlikoff notes, is politically implausible – if not politically impossible.

One way or another, the fiscal gap must be closed. If not, the country’s spending will forever exceed its revenue growth, and no one’s real debt can increase faster than his real income forever.

Prof. Kotlikoff uses “fiscal gap,” not the accumulation of deficits, to define public debt. The fiscal gap is the difference between a government’s projected revenue (expressed in today’s dollar value) and its projected spending (also expressed in today’s dollar value). By this measure, the United States is in worse shape than Greece.

Prof. Kotlikoff is a noted economist. He is a research associate at the U.S. National Bureau of Economic Research. He is a former senior economist with then-president Ronald Reagan’s Council of Economic Advisers. He has served as a consultant with governments around the world. He is the author (or co-author) of 14 books: Jimmy Stewart Is Dead (2010), his most recent book, explains his recommendations for reform.

He says the U.S. cannot end its fiscal crisis by increasing taxes. He opposes further stimulus spending because it will simply increase the debt. But he does suggest reforms that would help – most of which would require a significant withering away of the state. He proposes that the government give every person an annual voucher for health care, provided that the total cost not exceed 10 per cent of GDP. (U.S. health care now consumes 16 per cent of GDP.) He suggests the replacement of all current federal taxes with a single consumption tax of 18 per cent. He calls for government-sponsored personal retirement accounts, with the government making contributions only for the poor, the unemployed and people with disabilities.

Without drastic reform, Prof. Kotlikoff says, the only alternative would be a massive printing of money by the U.S. Treasury – and hyperinflation.

As former president Bill Clinton once prematurely said, the era of big government is over. In the coming years, the U.S. will almost certainly be compelled to deconstruct its welfare state.

Prof. Kotlikoff doesn’t trust government accounting, or government regulation. The official vocabulary (deficit, debt, transfer payment, tax, borrowing), he says, is vulnerable to official manipulation and off-the-books deceit. He calls it “Enron accounting.” He also calls it a lie. Here is an economist who speaks plainly, as the legendary straight-shooting film star Jimmy Stewart did for an earlier generation.

But Prof. Kotlikoff’s economic genre isn’t the Western. It’s the horror story – “and scarier,” one reviewer of his book suggests, than Stephen King.

Enron-style accounting?  From our government?  Say it aint so!!!

It’s isn’t a matter of IF America will financially collapse; it is only a matter of WHEN.  And “WHEN” is SOON.

And it will necessarily happen because Democrats are genuinely depraved.

Recklessly spending money on fools’ projects that your grandchildren will become debt slaves just trying to pay the interest on is immoral.

I can only keep begging Republicans to turn the Democrats’ demonization game back at them.  Democrats are running around on their talking points denouncing Republicans as “extremists” who want to kill poor people.

Bullcrap.

It is DEMOCRATS (I call them “Demoncrats,” for “Demonic Bureaucrats”) who want to implode America and kill tens of millions of American people by plunging this country into a great depression that will make the last one in the 1930s seem like a fun-filled day at the beach.

It’s not going to be the richest people who starve to death and die miserably in the cold.  It’s going to be all the people liberals love to say they care about – when in reality all they do is cynically manipulate them toward their own increasingly certain doom.

Don’t you dare forget that it has been LIBERALS who have been dreaming of undermining and imploding America financially since Cloward and Piven back in the 1960s.  And now we’ve got a JUST-ex SEIU official on tape plotting to send America into a financial crisis that will dwarf anything ever seen.

If you have a true death wish, and you vote Democrat, then by all means keep doing so, because they will give you the destruction and nihilism that you seek.  That’s the real meaning of Obama’s “hope and change.”

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I Can Give You 200 Trillion Reasons Why We Need To Cut Government Spending NOW

March 7, 2011

Republicans are trying to get our spending under control, and Democrats are demonizing them every single step of the way.  Because Democrats are demons, and demonizing is the only thing they know how to do.

For the record, Republicans are trying to cut an amount which is basically 1/30th of Obama’s budget deficit.

News from globeandmail.com
The scary real U.S. government debt
Wednesday, October 27, 2010

NEIL REYNOLDS

Ottawa — reynolds.globe@gmail.com

Boston University economist Laurence Kotlikoff says U.S. government debt is not $13.5-trillion (U.S.), which is 60 per cent of current gross domestic product, as global investors and American taxpayers think, but rather 14-fold higher: $200-trillion – 840 per cent of current GDP. “Let’s get real,” Prof. Kotlikoff says. “The U.S. is bankrupt.”

Writing in the September issue of Finance and Development, a journal of the International Monetary Fund, Prof. Kotlikoff says the IMF itself has quietly confirmed that the U.S. is in terrible fiscal trouble – far worse than the Washington-based lender of last resort has previously acknowledged. “The U.S. fiscal gap is huge,” the IMF asserted in a June report. “Closing the fiscal gap requires a permanent annual fiscal adjustment equal to about 14 per cent of U.S. GDP.”

This sum is equal to all current U.S. federal taxes combined. The consequences of the IMF’s fiscal fix, a doubling of federal taxes in perpetuity, would be appalling – and possibly worse than appalling.

Prof. Kotlikoff says: “The IMF is saying that, to close this fiscal gap [by taxation], would require an immediate and permanent doubling of our personal income taxes, our corporate taxes and all other federal taxes.

“America’s fiscal gap is enormous – so massive that closing it appears impossible without immediate and radical reforms to its health care, tax and Social Security systems – as well as military and other discretionary spending cuts.”

He cites earlier calculations by the Congressional Budget Office (CBO) that concluded that the United States would need to increase tax revenue by 12 percentage points of GDP to bring revenue into line with spending commitments. But the CBO calculations assumed that the growth of government programs (including Medicare) would be cut by one-third in the short term and by two-thirds in the long term. This assumption, Prof. Kotlikoff notes, is politically implausible – if not politically impossible.

One way or another, the fiscal gap must be closed. If not, the country’s spending will forever exceed its revenue growth, and no one’s real debt can increase faster than his real income forever.

Prof. Kotlikoff uses “fiscal gap,” not the accumulation of deficits, to define public debt. The fiscal gap is the difference between a government’s projected revenue (expressed in today’s dollar value) and its projected spending (also expressed in today’s dollar value). By this measure, the United States is in worse shape than Greece.

Prof. Kotlikoff is a noted economist. He is a research associate at the U.S. National Bureau of Economic Research. He is a former senior economist with then-president Ronald Reagan’s Council of Economic Advisers. He has served as a consultant with governments around the world. He is the author (or co-author) of 14 books: Jimmy Stewart Is Dead (2010), his most recent book, explains his recommendations for reform.

He says the U.S. cannot end its fiscal crisis by increasing taxes. He opposes further stimulus spending because it will simply increase the debt. But he does suggest reforms that would help – most of which would require a significant withering away of the state. He proposes that the government give every person an annual voucher for health care, provided that the total cost not exceed 10 per cent of GDP. (U.S. health care now consumes 16 per cent of GDP.) He suggests the replacement of all current federal taxes with a single consumption tax of 18 per cent. He calls for government-sponsored personal retirement accounts, with the government making contributions only for the poor, the unemployed and people with disabilities.

Without drastic reform, Prof. Kotlikoff says, the only alternative would be a massive printing of money by the U.S. Treasury – and hyperinflation.

As former president Bill Clinton once prematurely said, the era of big government is over. In the coming years, the U.S. will almost certainly be compelled to deconstruct its welfare state.

Prof. Kotlikoff doesn’t trust government accounting, or government regulation. The official vocabulary (deficit, debt, transfer payment, tax, borrowing), he says, is vulnerable to official manipulation and off-the-books deceit. He calls it “Enron accounting.” He also calls it a lie. Here is an economist who speaks plainly, as the legendary straight-shooting film star Jimmy Stewart did for an earlier generation.

But Prof. Kotlikoff’s economic genre isn’t the Western. It’s the horror story – “and scarier,” one reviewer of his book suggests, than Stephen King.

Enron-style accounting?  From our government?  Say it aint so!!!

It’s isn’t a matter of IF America will financially collapse; it is only a matter of WHEN.  And “WHEN” is SOON.

And it will necessarily happen because Democrats are genuinely depraved.

Recklessly spending money on fools’ projects that your grandchildren will become debt slaves just trying to pay the interest on is immoral.

Grayson Grills Bernanke: ‘Where Did Our Half Trillion Dollars Go?’

August 5, 2009

Are you a C-SPAN addict?  Me neither.  It is the truly desperate soul who pauses during a channel surfing session on a C-SPAN channel of some boring Congressional proceeding.  Who wants to watch a bunch of arrogant stuffed-shirt elitists argue with one another in a series of one boring speech after another?

Ah, but every now and then something of significance actually happens – and when such a once-in-blue-moon event occurs – C-SPAN is there to capture the action.

Such a moment occured when Florida Republican Rep. Alan Grayson questioned Barack Obama’s arse-smooching Federal Reserve Chairman Ben Bernanke.

This is by no means an official transcript, but it does reflect the sense of part of the exchange.  Every American should watch it to learn just how screwed up our “experts” have made our system:

Grayson: I would like to direct your attention to page 26 of the report you handed out this morning which consists of your balance sheet.  And one of the entries on your balance sheet under assets is central bank liquidity swaps which shows an increase from the end of 2007 from $24 billion to $553 billion and change at the end of 2008.  What’s that?

Bernake: Those are swaps done with foreign central banks.  Many foreign central banks are short dollars, and so they come into our markets looking for dollars and drive up interest rates and create volatility in our markets.  What we’ve done is create a swap: we buy their currency and they buy ours.  That lowers interest rates across the globe.  They take the dollars, lend it out to the banks in their jurisdiction, and that helps bring down interest rates in the global market for dollars and meanwhile we’re not lending to those banks, we’re lending to the central banks; the central bank is responsible for repaying us.

Grayson:So who got the money?

Bernake: Financial institutions in Europe and other countries.

Grayson: Which ones?

Bernake: I don’t know.

Grayson: Half a trillion dollars and you don’t know who got the money?

Bernake: Uh, the loans went to the, the loans go to the central banks and they, uh, they put them out to their, uh, to their institutions to try to bring down short term interest rates in financial markets around the world.

Grayson: Well let’s start with which central banks got the money.

Bernake: They’re 14 of them which are listed, um, in our, i’m sure they’re listed in here somewhere.

Grayson: Who actually made that decision to hand out half a trillion dollars that way?

Bernanke: The Federal Open Market Committee.

More…

Grayson: All right. We actually looked at one of the arrangements and one of the arrangements is 9 billion dollars for New Zealand. That works out to $3000 for every single person who lives in New Zealand. Seriously, wouldn’t it have been better to extend that kind of credit to Americans than New Zealanders?

Bernake: It’s not costing Americans anything, we’re getting interest back and it comes back, not at the cost of any Amercian credit. We are extending credit to Americans, too.

Grayson: Well, wouldn’t it necessarily affect the credit markets if you extend half a trillon dollars in credit to anybody?

Bernake: We are lending to all US financial institutions in exactly the same way.

Alan Grayson: Well, look at the next page, the very next page has the US dollar nominal exchange rate which shows a 20% increase in the US nominal exchange rate at exactly the same time that you were handing out a half a trillion dollars. You think that’s a coincidence?

Bernake: Yes.

Alan Grayson (Breaks out laughing at the sheer absurdity of Bernanke’s calculated refusal to acknoweldge the obvious no matter how obvious it is…).

Watch the video and pass it along:

The purpose of this is not merely to slam Democrats.  George Bush wanted to do the most massive financial bailout in history – and while Democrats provided the MOST support for the $700 billion Bush-Paulson TARP bailouts – Republicans supported it too.  Enraged House Republicans voted down the measure after Nancy Pelosi used the opportunity to politically demagogue them, but enough of them ended up supporting the bailout plan.  Ultimately two-thirds of Democrats and one-third of Republicans voted to pass the measure.  John McCain supported it as a presidential candidate right along with Barack Obama.  And we have been throwing billions and even trillions of dollars around ever since.

Republicans were wrong.  Democrats were far more wrong, of course, because they are always far more wrong.  But Republicans should have put their foot down to prevent the financial-whiz-kid takeover of our entire political and economic system.

Something is incredibly sick with our system, because somehow that $700 billion TARP bailout has morphed into a $23.7 TRILLION TARP bailout, as the special inspector general for the Treasury’s Troubled Asset Relief Program, Neil Barofsky, recently made public.

And Barack Obama’s and Turbo-Tax Tim Geithner’s Treasury Department – caught red-handed spending and loaning FAR more than they ever should have been allowed to spend and loan – managed to turn the issue into a quibbling over just how much money we could theoretically lose at one time.  When the bigger question was, “Just how does an authorization of $700 billion become an authorization for $23.7 trillion?”

The difference between Democrats and Republicans at this point is that Republicans – who now openly admit they spent too much when they were in power – have wised up.  Meanwhile, Democrats who attacked “dangerous” and “irrepsonsible” federal spending under Bush have taken “dangerous” and “irresponsible” to levels never before even dreamt of. Democrats are utterly determined to keep up the insane spending spree until we are utterly imploded with debts even our children’s children’s children’s children’s children will never be able to hope to repay.

Since TARP, Obama has passed a $3.27 trillion stimulus that didn’t stimulate, a 9,000 earmark-laden $410 billion omnibus bill, and a $3.55 trillion federal budget that adds more to the debt than all previous US presidents from George Washington to George W. Bush – combined.  And even as we play aound with $2 trillion more for health care “reform” and throw billions of dollars more into “Cash for Clunkers,” there’s no sign that we are on any kind of slowdown as we race toward the economic cliff ahead.

We are experiencing a sickness that might well be epitomized by Vice President Joe Biden’s statement: “We have to spend money to keep from going bankrupt.” They are the words of a fool – and yet fools are now in total charge of our country as they pursue their fools’ agenda.

They want to play their political power games, rewarding their political allies and punishing their political opponents.  They want to stay in power forever.  They want to sit in their offices with their staffs and their benefits and their various fiefdoms.  They don’t want to protect the United States from calamity.  They somehow think that America is eternal and can never be defeated or destroyed.  They’re going to be in for a great wake-up call – and the nation right along with them – when it all goes to hell due to their insane lack of responsibility.

Obama’s Class-Warfare Approach Will Harm Country

July 30, 2008

Barack Obama can fix everything just by taxing the rich. He can massively increase social spending simply by taxing the bejeebers of the evil and greedy rich. You CAN eat your cake and have it too!!!

There’s only one thing wrong (apart from the whole Marxist class warfare thing) with his plan:

Obama foolishly believes that raising taxes on the rich will be a panacea so that he can engage in all kinds of massive social programs (to the tune of $874 billion in new spending). He plans to raise $100 billion by increasing taxes on the rich. What he doesn’t understand is that the rich will change their behavior, begin sheltering their money, and suddenly government will see its stockpile of golden eggs shrink, and keep shrinking. Obama is counting on the rich acting exactly as they have been acting as a result of the Bush tax cuts. But he simply doesn’t understand that that isn’t the way real life actually works.

In today’s paper there was an Associated Press article discussing the federal budget deficit that contained the following statement on taxes vis-à-vis revenues.

McCain promises to renew the full roster of Bush tax cuts enacted in 2001 and 2003 and add many more for businesses and upper income people who pay the alternative minimum tax. The Bush tax cuts expire at the end of 2010 and renewing them would soon cost well over $200 billion a year. Eliminating the alternative minimum at the same time would cost almost as much.

The sentence “The Bush tax cuts expire at the end of 2010 and renewing them would soon cost well over $200 billion a year” is completely true – if human beings are simply robot idiots. It’s completely false if people react to changing environmental conditions by changing their behavior. The thing is that people AREN’T robot idiots and they DO change their behavior to avoid negatives and take advantage of positives.

The rich don’t think in stupid, stagnant terms anymore than anyone else does.

Think of the recent high gas prices. Americans have overwhelmingly altered their behavior as a result of the high gas prices, driving nearly 10 billion fewer miles compared to last year. As the price of gas became more and more expensive, Americans reacted by altering their behavior. And if the price of gas goes back down, people will respond by increasing their driving.

And the rich do the same thing. They react to high taxes by sheltering their money, and they react to lower taxes by increasing their investments and growing their business.

The easiest example of this is the luxury tax that Democrats stupidly applied to items like yachts some years back. They saw only the additional revenue they would obtain by “soaking the rich,” but the rich – faced with a 10% additional tax – simply stopped buying yachts and the result nearly destroyed the boating industry. You don’t get rich by being stupid with money. But Democrats think entirely in class-warfare terms, and are simply incapable of learning this lesson.

What liberals – both in politics and in the media – do is look at the tax revenues, put in the higher tax rates they prefer, and calculate that they would make X.XX% more if the tax rate were higher. But that’s simply false, and it has been factually and historically proven false.

The Bush tax cuts produced higher than projected revenue – to the tune of a 35% growth between 2003 and 2006.  In comparison, during the height of the Clinton economy between 1997 and 2000 – when he didn’t have 9/11 (and the subsequent hit to the economy) and we didn’t have wars in Afghanistan and Iraq dragging us down, federal receipts still rose only 28.2%.

A July 13, 2005 New York Times story titled “Sharp Rise in Tax Revenue to Pare U.S. Deficit” said:

The big surprise has been in tax revenue, which is running nearly 15 percent higher than in 2004. Corporate tax revenue has soared about 40 percent, after languishing for four years, and individual tax revenue is up as well.

Most of the increase in individual tax receipts appears to have come from higher stock market gains and the business income of relatively wealthy taxpayers. The biggest jump was not from taxes withheld from salaries but from quarterly payments on investment gains and business earnings, which were up 20 percent this year.

A Treasury Department analysis found that the tax cuts prompted the creation of jobs and increased the gross domestic product. It points out that:

Lower tax rates enable workers to keep more of their earnings, which increases work effort and labor force participation. The lower tax rates also enable innovative and risk-taking entrepreneurs to keep more of what they earn, which further encourages their entrepreneurial activity. The lower tax rates on dividends and capital gains lower the cost of equity capital and reduce the tax biases against dividend payment, equity finance, and investment in the corporate sector. All of these policies increase incentives to work, save, and invest by reducing the distorting effects of taxes. Capital investment and labor productivity will thus be higher, which means higher output and living standards in the long run.

Prior to the Reagan Revolution in 1981, the top marginal federal income tax rate was 70% (it is currently 35% under President Bush). At the 70% rate, the top 1% paid only 19% of the federal income tax burden, and the top 5% paid 37%. With the tax rate cut in half, the top 1% are paying more than twice as much of the total tax burden – nearly 40% – and the top 5% are paying nearly 60%.

And not only do the rich pay a higher percentage of their wealth in taxes under the lower taxes of the Bush plan, but they pay a higher ratio of their wealth in taxes than they did when the rates were higher.

If Obama counts on wealthy Americans to act the same with punitive tax rates that they do with low tax rates, he’s simply mistaken. If he raises the rich’s taxes, they will shelter their money and figure out ways to pay less and less. Even John Edwards and John Kerry sheltered their money to avoid paying taxes. And they’re more wonderful than anybody!

And when Obama can’t pay for his $874 billion extra spending by taxing the rich, he’ll come after you.

Don’t fall for the class-warfare strategy. It didn’t work for the Soviet Union, and it won’t work for the United States.

Low taxes is good for ALL the people by providing incentives for business investment and economic growth. The key to any budget is to live within one’s means, and not spend more than one takes in.

An Obama presidency would fail on both counts.