Latest Issue
Finding Revenue
December 15, 2023
If you really want to reduce the federal debt, you don’t have to convince Congress of anything. You can just write a check. The Treasury Department gladly accepts gifts from anyone so inclined.
Few are, apparently. So far this year, donations totaled less than $1 million. Shocking, no? <grin>
The government’s revenue is mostly involuntary via taxes, and it’s still not enough to cover spending. We fill the gap with borrowed money that must eventually be repaid from tax revenue with interest.
We can and should work to reduce spending, but finding more revenue is part of the answer, too. The easy button went away 20 years ago during Bush 2. It could have been fixed under Obama except once again everyone wanted to spend more and Congress wouldn’t raise taxes enough to cover it. Interest rates were low so why not borrow when rates were 2% or less? Ironically, interest costs went down even as the debt increased. Now we are paying the piper.
Now, when I say the government needs more revenue, it doesn’t necessarily mean via income tax. That’s just one kind of tax. There are things we can do to make that system fairer and more efficient, but also other ways to raise revenue. When the crisis hits, and it will, everything should be on the table as we seek ways out of this mess.
I know there are readers who would prefer not to raise taxes and would somehow like to think that we can do it with cutting spending. I was in that camp myself for decades. The markets aren’t going to give...
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