Twin Horns of an Angry Bull

On Fox News Sunday today, Eric Cantor, the current Republican whip and projected majority leader in the next Congress, stated that “we do not have a revenue problem. We have a spending problem.”

Below is a 10 year chart of Federal Revenues, excluding Social Security taxes (Source). Using CPI adjustment factors from the Bureau of Labor Statistics, I have shown revenues in constant 2000 dollars, or real dollars. Mr. Cantor does not think this is a “revenue problem.” I would not want Mr. Cantor as my accountant. (Click to enlarge in separate tab)

The real picture is that we have BOTH a revenue problem and a spending problem.

Below is a chart of defense spending in the past 10 years. In real dollars, it has almost doubled.

Next is a chart of human resource spending. I have excluded most of Social Security and Medicare. It has more than doubled in the past ten years.

Let’s imagine that you and your family were sitting at the kitchen table looking at similar charts of your finances. Your family income is about the same as it was 8 years ago yet your chief expenses have doubled. It’s obvious that your family will have to cut spending. It is also clear that you are going to have to find a way to bring in more money. Now imagine the budget fight when you suggest that you are going to cancel the data plan for your teenage daughter’s cell phone. How will you feel when your spouse suggests selling the newer model car you drive to work and buying an older compact car? What is your spouse’s reaction when you suggest that he or she deliver pizzas at night after work? These are tough discussions at the kitchen table or in the halls of Congress. 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s