THOUGHTS ON THE BUDGET, from The Economist:
The historical average for tax revenues as a percentage of GDP for the last 45 yearsâ€”roughly, the span of the modern taxation eraâ€”is 18.2%; in 2006, the government collected 18.4% of GDP as tax revenues. Even if you throw out the Bush budgets of 2002-2006, the average rises only a tenth of a percent, meaning that America is still above its historical average. The same holds true for budget deficits. The historical average is 1.6% with the Bush years, 1.5% without, making last year’s 1.8% budget deficit look less than outlandishly out of line.
The interesting thing is that no one knows these happy facts. Democrats are still harping on budget deficits as if (a cynic would say “because”) they were a gigantic mess, rather than a shrinking problem. This is not an excuse for running deficits, of course; there is no reason that a prosperous nation should be borrowing money to run its government when the economy is booming. But America’s budget deficit is small enough that it is now unlikely to be having any sort of measurable effect on the economy, and inflation and economic growth will quickly erode the value of recently accumulated debt. Mr Bush may leave a large number of problematic legacies for future generations, but the revenue shortfalls of recent years will not be noticed among them.
Read the whole thing. It’s no reason to lighten up on pork, though.