In recent days, Howard Dean and other social redistributionists have bloviated that the way to solve the Nation’s fiscal problems is to return to the tax rates under President Bill Clinton. Here’s a better suggestion: Return to Clinton-era spending.
In 2000, Clinton’s last year in office, Federal spending hit $2.325 trillion. Federal revenue that year was $2.632 trillion.
In 2012, Federal spending under President Barack Obama was $3.563 trillion. Cut Federal spending back to Clinton-era levels and with 2012 revenues under the Obama tax cuts coming in at $2.435 trillion, the U.S. is no longer deficit spending.
Under the tax cuts (first implemented by President George W. Bush and continued by Obama), the government took in more revenue during Bush’s eight years ($17.427 trillion) than during Clinton’s ($16,970). In 2007, Federal revenues were $150 billion more under Bush than during Clinton’s highest revenue year, which was 2000.
In fact, despite the depression, Federal revenues have been fairly constant. Under Clinton’s last four years, Federal revenues totaled $9.530 trillion versus $9.238 in Obama’s first four. The problem is not revenues or the lack thereof. The problem is spending: first under Bush and then Obama.
Since 2002, Federal spending per household climbed from $23,010 to $29,691 in 2012, a 29 percent increase (adjusted for inflation).
Now, redistributionists on both sides of the aisle are proposing increased spending and higher taxes as a “solution” to the fiscal cliff. Neither side is talking of cutting spending in any meaningful way.
Forget more spending and taxes. Return to Clinton-era spending and the fiscal crisis is on the road to a solution. Of course, it’ll never happen.