Tuesday, August 30, 2016

You want to trigger a recession? Balance the budget.


The projected FY 2016 deficit is $615 billion dollars.  Where do you want to take it out of?  HSS, the top expenditure?  Medicare is in there you know.  How about from the second expense line, Social Security?  I know people who would take it all out of the military but that would only be a $576 billion dollar savings, not the whole thing.

How about increasing taxes?  How about putting it all on corporations?  Raise their taxes from $300 billion to $600 billion.  It won’t work because it will kill off many companies which will kill off so many jobs personal income tax would plummet.

Corporations don’t really pay income tax anyway as they pass it on.  Usually in higher prices and lower payroll.  So we might as well just put it on the individual which is where most of the federal government revenue comes from directly.

The deficit is 23% of personal income tax and payroll tax.  Only half of the people pay income tax so the whole thing goes on half the population.  Is that going to impact the economy like it was a 46% tax increase?


I know.  Let’s create an economic school of thought, call it Keynesianism, and believe that deficit spending is good because it creates aggregate demand.  That would make me sleep well.



2016
Budget Receipts
   Individual Inc Tax and Payroll Tax 2,674,940
   Corporation Income Taxes    292,561
   Unemployment Insurance      49,874
   Other Retirement        3,816
   Excise Taxes      96,821
   Estate and Gift Taxes       21,094
   Customs Duties      36,721
   Miscellaneous Receipts    159,675
   Total Receipts 3,335,502
Budget Outlays
   Department of Health and Human Services 1,110,428
   Social Security Administration    991,558
   Department of Defense--Military Programs    576,328
   Interest on Treasury Debt Securities (Gross)    447,293
   Department of Veterans Affairs    177,612
   Department of Agriculture    153,773
   Office of Personnel Management      93,883
   Department of Treasury operations           93,083
   Department of Education      79,098
   Department of Transportation      77,832
   Other Defense Civil Programs      63,679
   Department of Homeland Security      51,769
   Department of Labor      43,546
   Department of Justice      39,115
   Department of State      30,911
   Department of Housing and Urban Development      28,691
   Department of Energy      27,416
   Independent Agencies      22,624
   National Aeronautics and Space Administration      19,153
   International Assistance Programs      16,042
   Department of the Interior      14,022
   Department of Commerce      10,527
   Environmental Protection Agency              8,340
   Judicial Branch        7,729
   National Science Foundation        6,895
   Corps of Engineers        6,705
   Legislative Branch        4,728
   Allowances        1,875
   Executive Office of the President           400
   Small Business Administration          -378
   General Services Administration          -719
  Surface Transportation Board
   Undistributed Offsetting Receipts:
     Interest    -151,495
     Other    -101,156
   Total Outlays 3,951,307
   Surplus (+) or Deficit (-) -615,805

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