Been studying the federal deficit and the proposed tax reform and came up with the following observations: the federal deficit has held steady at under 4% of the GDP for a long time except during the 'Keynesian spend us out of a recession' first term of President Obama. At this rate it would take 25 years to build up a deficit of a full year's GDP, where we are today at over $20 trillion. By then you would have generated 25 years of GDP, so your debt to asset ratio should be in the range of 4%. Anyone managing their individual finances would see that this is a manageable debt to asset ratio. The U.S. economy has had an annual GDP of at least $10 trillion since 1994 (a period of 23 years to date) suggesting a GDP build up of over $230 trillion. The federal annual receipts are about $3 trillion currently. This is roughly 15% of GDP. At this rate, for a GDP of about $300 trillion in 25 years, these receipts should come to $45 trillion or $1.8 trillion a year. The current annual spending outlay is about $3.5 trillion, hence the deficit. To balance the budget for this outlay with a receipt increase (note this is not just a tax increase, but can include other forms of revenue) the receipts have to reach a rate of 17.5% of GDP. This is just a 2.5% increase. If the balancing also includes spending cuts, this percentage will be even less. Reducing the spending outlay to $3 trillion would mean the receipts as a percentage of GDP do not have to increase. You can balance the budget by increasing revenue and/or cutting spending. Taking care of the accumulated deficit so far is a 4% a year proposition over 25 years (don't we take 30 for our mortgages at similar rates?) Decreasing the federal revenue with tax cuts does not make sense unless it is a ploy to force massive spending cuts, thereby shrinking the government, or if you choose to maintain the government as is, force a privatization of much of its assets.
When the government spends money, it also contributes to the GDP. By spending more than it receives, the government in fact converts more than its receipts into GDP, what tax cuts are indirectly supposed to do. So all that is going on is deciding who spends the money and for whom, i.e. whether a private or public agency/beneficiary is at work.
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