April 22, 2022
Dear editor;
I found myself agreeing with much of what John and Nisha Whitehead said in their article in The Voice, April 21, Financial tyranny can stifle fiscal responsibility. Yes, our national debt is out of control and shameful. Just like most of us, the Whiteheads blame out of control federal spending but the facts appear to point in a different direction. Although it certainly can be argued that the government spends too much, the level of spending as a proportion of GDP in recent years has been essentially the same as it was in 1960. That is, as a percent of GDP, federal spending has not risen in any meaningful way. It is excluding Social Security and Medicare, which are funded and spend money outside of the rest of the budget. Spending on these two programs can be addressed, but it would be disingenuous to lump their numbers in with the cost of running government. Indeed, Medicare didn’t exist in 1960.
But if federal spending isn’t any higher, then how can we explain our massive debt? The budget records give us the answer. In 1960, corporate and excise taxes combined represented 6.2% of our GDP; in 2019, they only paid out 1.6%, meaning that during the intervening years, we reduced those taxes by almost 5% of GDP, but failed to make up for the shortfall. It suggests that reducing tax revenues, not increased spending is responsible for the lion’s share of our debt.
The Whiteheads stated that we spend more on foreign aid than any other nation. Although not false, it is deceptive. We spend more on almost everything than smaller nations just because of our size. The more pertinent figure is how much we spend as a percentage of our incomes, or GDP. This figure turns the Whiteheads’ argument on its head. According to the Brookings Institute, “The average for all wealthy nations is around 0.3% (of GDP). The U.S. ranks near the bottom at below 0.2%.” www.brookings.edu/policy2020/votervital/what-every-american-should-know-about-us-foreign-aid.
*Figures taken from whitehouse.gov/omb/budget/historical-tables Tables 14.5 and 2.3
Craig Zabel, Sugar Grove