Michael Kinsley asks a very good question:
If the national debt doesn't matter, why do we have taxes at all? Why not just borrow the entire federal budget?
And if it does matter, start reducing it. If $1.6 trillion isn't the point at which deficits start to matter, he adds, where in the world is it?
Comments
I expect the number is some function of GDP.
And do you raise taxes or reduce government spending? Both have the potential to reduce GDP. So, pick your poison.
GDP is the wrong parameter to use in creating a budget. Over the past century GDP's ratio of its input has changed. I have always thought using pure (total) income would be a better parameter to use. Using GDP lowers the tax rate overall, but when compared to income, it is very high. I guess politicians like to present a lower value tax rate to calm voters "it has been 18 19% of GDP for decades" but in reality it is 40% of income.
The problem with "income" is that it gets defined differently at different times. It's NET domestic product, instead of GROSS, but what is it that you're subtracting to get net?
I suspect the ancient Israelis had it right; the tithe was based on assets instead of income. They paid a tithe twice a year, and every third year, there was another tithe. We could finance local, state, and federal government, all three, with one tithe annually, with plenty left over to rebuild our deteriorating infrastructure.