Do we have a revenue problem?

Take a look at the average American’s share of federal revenue and spending from 1920 to now, adjusted for inflation to the value of a dollar in the year 2005. Click the chart to see it at full size.

We do not have a revenue problem

Since around 1995, the amount of revenue Uncle Sam has been able to squeeze out of the average American has leveled off between $6000 and $8000 per year, suggesting that we’ve hit the practical limit. Historically, the most revenue the federal government can expect to raise is an average of 18% of GDP (Gross Domestic Product; the entire annual American economy). In brief boom times or during existential threats like World War II, the federal government can squeeze more than 18% out of the economy, but it never lasts long. No matter how hard Uncle Sam tries, the biggest average chunk he can grab is locked in at 18% of the economy, because people respond to taxes.

In the seventeen years since 1995, Uncle Sam’s borrowing and spending has not leveled off. The average American’s share is past $10,000 per year and climbing. Our debt is piling up faster than we can repay it. The “recovery” from the late 2008 economic crash has been flat for years, but Uncle Sam keeps pushing the gas pedal down as we drive toward the edge of the cliff.

There is no more revenue to be had.

Squeezing blood from a stoneIf the federal government raises taxes it can only collect more than 18% of the economy for a short period, and then revenue will drop again, as always. If the government keeps borrowing — or tries to print boatloads of money — to feed its spending addiction, the inflation rate will skyrocket. That will destroy the value of the dollar, which will destroy the economy and your life’s savings.

As long as “money out” is a bigger number than “money in,” the national debt will grow and you’ll be on the hook for it. It will sink the economy as surely as that iceberg sank the Titanic. “Money in” is not going to get bigger, but “money out” absolutely will keep getting bigger as long as we keep sending the same progressives to Washington. They won’t stop themselves. Only we can stop them by replacing them with sane people who will reduce “money out” until it’s a lot lower than “money in,” and keep it there for generations. We can either take our medicine now and have an unpleasant experience, or we can keep deceiving ourselves and watch America collapse. There is no third option. The insane big-spending politicians in Washington are going to ruin your life and your children’s lives unless you stop them. Listen to the warning and save your country and your family.

We do not have a revenue problem. We have a spending problem. Anyone who tells you otherwise is either misinformed, a fool, or a liar.

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