As everyone is running around blaming each other for our fiscal mess take a look at some historical numbers and then ask; "WHAT HAPPENED?" Just how did we find ourselves with the absurd annual numbers we have now?
1950
Federal Debt = 257.4 Billion
Revenue = 66.68 Billion
Spending = 70.3 Billion
Deficit - 3.62 Billion
Individual Income tax rate = 91% over 200,000
Corporate income tax rate = 42% over $25,000
Average annual income (per capita)= $1501
Unemployment = Between 4.2 and 6.5%
1960
Federal Debt = 268.3 Billion
Revenue = 153 Billion
Spending = 151 Billion
Surplus = 2 Billion
Individual Income tax rate = 91% over 300,000
Corporate Income tax rate = 52% over $25,000
Average annual income (per capita) = $2219
Unemployment = Between 4.8 and 6.6%
1970
Federal Debt = 370.9 Billion
Revenue = 321.1 Billion
Spending = 322 Billion
Deficit = 900,000
Individual Income tax rate = 70% over 180,000
Corporate Income tax rate = 49.2% over $25,000
Average annual income (per capita) = $3,893
Unemployment = Between 3.9 and 6.1%
1980
Federal Debt = 907.7 Billion
Revenue = 885.62 Billion
Spending = 940 Billion
Deficit = 54.38 Billion
Individual Income tax rate = 70% over $161,300
Corporate Income tax rate = 46% over $100,000
Average annual income (per capita) = $9,910
Unemployment = Between 6.3 and 7.8%
1990
Federal Debt = 3.23 Trillion
Revenue = 1.927 Trillion
Spending = 2.1 Trillion
Deficit = 173 Billion
Individual Income tax rate = 28% over $28,050
Corporate Income tax rate = 34% over $335,000
Average annual income (per capita) = $19,188
Unemployment = Between 5.2 and 6.3%
2000
Federal Debt = 5.67 Trillion
Revenue = 3.675 Trillion
Spending = 3.24 Trillion
Surplus = 435 Billion
Individual Income tax rate = 39.6% over $297,350
Corporate Income tax rate = 35% over $18,333,333
Average annual income (per capita) = $$29,845
Unemployment = Between 3.8 and 4.1
2010
Federal Debt = 13.56 Trillion
Revenue = 2.381 Trillion
Spending = 3.591 Trillion
Deficit = 1.21 Trillion
Individual Income tax rate = 35% over $373,650
Corporate Income tax rate = 35% over $18,333,333
Average annual income (per capita) = $40,504
Unemployment = Between 9.4 and 9.8%
SUMMARY;
What do all the numbers reveal?
Between 1950 and 1970 (a 20 year period) the Federal Debt increased only 113 Billion (mostly during the 1960's Vietnam War era) or 43%( just over 2% per year).
Based on the average annual income figures during the 1950's and 60's the 91% top tax rate was virtually meaningless.
The Federal Debt went up two and a half times during the 1970's
The Federal Debt went up three and a half times during the 1980's
The Federal Debt went up ONLY 70% between 1990 and 2000
the Federal Debt more than doubled between 2000 and 2010
How did all this happen?
Some KEY events;
By 1990 the Top income tax rate had been lowered to 28% BUT on income over $28,050 which was only about $9,000 over the average per capita income.
By 1990 Federal Revenues had grown to almost 2 Trillion dollars BUT our Debt was 3.23 TRILLION in 1990.
The 2000 figures reveal the most telling story of why we are in the situation we are in now. In 2000 we had Revenues of 3.65 Trillion and spending of 3.240 Trillion for a SURPLUS of 435 Billion.
The 2010 SPENDING of 3.591 Trillion dollars represents an increase over the 2000 spending numbers by ONLY 351 Billion (or just over a 10% increase from a full decade earlier)which compared to any other decade in this review showed a very positive result.
The biggest key to our current deficits is the fact that Federal Revenues have DECREASED from 3.675 TRILLION in 2000 to 2.381 TRILLION in 2010. As spending for Defense INCREASED from 358.68 Billion in 2000 to 871.89 Billion in 2010 and SPENDING for Welfare has INCREASED from 176.57 Billion in 2000 to 427.65 Billion in 2010 and SPENDING for Healthcare has INCREASED from 351.65 Billion in 2000 to 846.83 Billion in 2010 it is the REVENUE DECREASE that has created the huge deficits we have now. I have not even included Social Security "spending" here because it should not be a part of the annual Federal Budget at all. But, there is over 900 Billion figured into the revenue and spending projections for 2010 (these figures were about 550 Billion out in 2000 and about 710 Billion in in 2000.
With Defense spending eating up 36% of revenues the social security/ pensions eating up almost 1/3 of the Federal revenues HUGE Federal deficits simply cannot be avoided without a dramatic INCREASE in Federal revenues. All the posturing and bickering about "cuts" to various programs will never bring about anything close to a balanced budget or any reduction in our overall debt. The ONLY WAY to accomplish the so-called goals of both parties is to face the fact that there MUST be substantial increases to income tax rates and revenues and decreases to Defense spending (back to 2000 levels) and decreases in welfare spending (back to 2000 levels) and a serious assault on controlling health care costs throughout the medical and insurance industry.A KEY requirement for any additional revenue gained through tax increases MUST be used specifically to reduce the overall debt and NOT simply used for additional spending.A plan to use any additional revenues gained from tax increases to begin to repay the Social Security Trust Fund the 3 Trillion dollars that Congress has "borrowed" during the past 40 years. This would not only reduce the overall debt but also make Social Security more solvent.
Of course, the two main political Parties will not and cannot do the right thing because the money interests who support them will not allow it. They will continue to scare citizens with 10 or 20 year forecasts (which are themselves meaningless) to intimidate voters on both sides. Welcome to the continuing fall of America.
It is TIME TO THINK AGAIN!
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