The Republican Party isn't serious about reducing the deficit

In the wake of the 2012 Presidential Election, President Obama has (belatedly) decided to tackle the national deficit - or at least find a more politically palatable way to avoid the fiscal deficit.

House Leader John Boehner has decided to oppose President Obama's proposals to raise taxes on the 'rich' and most Americans now consider a deal on the Fiscal Cliff unlikely.

This begs two questions:

1)  Are taxes too high?

At present, the United States federal tax (this stat excludes Social Security payments for all countries) is 5th lowest in the world and 2nd lowest amongst developed nations.  

If we compare the country to it's total history, tax revenue is now at it's lowest level since 1950. 

Moreover, federal Revenue as a % of GDP could increase by about 10%, and still be lower than about 90% of years since 1950 (and still keep the U.S. in the top 10 lowest taxed countries - lower than Canada and all of Europe).

When this is compounded with the CBO's finding that the top marginal tax rate has neglible impact on the economy, there is no reason to think that taxes are too high.

With that being said, this blog does not advocate any more than a 10% tax increase; a number that would reduce the deficit by about 15% - a sizeable bite to be sure - but nowhere near the amount needed to reduce the deficit on it's own.

2)  What would it take to wipe out the deficit without raising revenue?

Short answer:  An act of God.

Long answer:  Defense spending would have to be reduced by just over 40%,   Discretionary spending would have to be reduced by another 20% (on top of already proposed slashes in spending), Social Security would have to be modified to an approach proposed by this blog in May and Medicare would have to be slashed by another 35-40%. (Sources at bottom).

In short, it's virtually impossible to balance the budget through spending cuts alone.

That being said, this blog is not endorsing the current administration either.  An administration that has racked up trillion dollar deficits + for the last 4 years cannot be taken seriously on the issue of deficit reduction.   If however, the President and Senate Democrats were willing to reduce federal spending by $4-$10 for every new dollar in federal revenue, this blog would be willing to reconsider it's position.

Ultimately, this blog would like to see Republicans be willing to compromise on very modest tax increases if it would lead to long term sustainability - the current Republican party has shown no willingness to do that.

http://motorgasm.wordpress.com/category/u-s-government/page/7/

http://useconomy.about.com/od/usfederalbudget/p/Discretionary.htm

http://pmacpginsights.blogspot.com/2012/05/mission-protect-future-of-us-part-3.html