Bruce Barlett looks at tax trends:
According to the historical tables, federal revenues will only consume 14.4 percent of GDP this year the lowest percentage since 1950. The postwar average is about 18.5 percent and there were many very prosperous years when revenues were considerably higher. In the late 1990s, they averaged more than 20 percent of GDP, which was a key reason why we ran budget surpluses.
Alex Knapp adds:
This is not to say that spending doesn’t need to be curtailed. I think it does. Indeed, I outlined a few ideas here including a bigger federal role in curtailing health care costs, because such costs are the biggest driver of increased Federal spending.
But the second biggest driver, going forward, is interest on the debt. And that debt is caused by cutting taxes when the budget is in the red. And everytime a politician wants to cut taxes without commiserate spending cuts, he is advocating increased spending on debt service. Which is awesome for bondholders. But pretty terrible for the rest of us.