Federal outlays, not including defense and net interest payments, as percent of GDP:
1988: 12.57% (Reagan's last year in office) 1992: 14.39% (Bush's last year in office) 1993: 14.22% 1994: 14.31% 1999: 13.95% 2000: 14.02% (Clinton budget proposal)
(source: Historical Statistics, Budget FY2000.
>> . . .
As for Max's comments about regressive taxes paying off the debt to rich
bondholders, it is the same regressive taxes paying interest on those bonds
as well. The difference is that if the bonds are paid off, the rich
bondholders over time collect far less from those regressive taxes.
Obviously, the best solution is more progressive taxes, but in the abscense
of that, paying off debt will help open up revenue in the future for other
uses.
>>
This is what we were told about deficits for ten years. Get rid of them, then we can have domestic spending increases. Paying off the debt will take 15 years, optimistically speaking.
Why isn't revenue "opening up" now? What does it take for it to open up? If not now, when?
If the debt is paid off, the rich bondholders become rich stockholders and continue to collect their rents. Workers will continue to pay payroll taxes, since after all the trust fund will run short in 35 years. They will get no social spending to compensate for the tax payments, since the receipts will be channeled into debt pay-down.
>>
Let's be clear-- we spend more each year on interest payments to those rich
bondholders than we spend on aid to the poor in all its forms. If that
distribution of tax dollars is Keynesianism (which I don't believe BTW) then
it is a terrible rightwing policy.
>>
Let's be clearer.
FY 1999
Net interest payments: $227 billion Net interest payments to rich: less than $227 billion
Some means-tested programs: Medicaid: 109 billion EITC 26 Food Stamps 23 Housing subsidies 14 Nutrition (WIC, etc.) 13 SSI 28 TANF 17 Vets income security 19
Not included: those portions of Social Security, Medicare, and Unemployment Compensation received by the poor.
The object of borrowing is not to produce keynesian effects via interest payments. It's the borrowing that does it.
mbs