PrintApril 26, 2011
Cutting the Federal Budget
Hauser's Law tells us that whatever the tax structure, the federal government can't collect more than 19% of GDP in taxes on a sustained basis -- meaning that either taxpayers will find loopholes to avoid taxes or that the disincentives of higher tax rates will result in lower tax payments and/or lower overall economic growth.Estimated spending for fiscal year 2011 looks like this:Federal expenditures 2011($ billions - numbers rounded to the nearest $25 billion) % of GDPSocial Security$ 750 billion5.0%Medicare$ 500 billion 3.3%Medicaid$ 400 billion2.6%Unemployment$ 625 billion 4.1% Defense$ 775 billion 5.1%Other$ 525 billion3.5%International Affairs$ 50 billion0.4%Interest $ 200 billion1.4%Total$3,825 billion25.4%Let's take this as the limit for the...(Read Full Article)
