It’s not hard to see that the federal government has a spending problem , not a revenue problem, despite protestations by apologists, beneficiaries and cheerers of big government. How do we know it’s not a revenue problem?
An impasse over the shape of the federal budget keeps boiling down to this basic plotline: Democrats say the solution to high deficits must include more tax revenue, while Republicans say the fundamental problem is spending.
Failure to reach a middle ground has prompted automatic spending cuts known as the “sequester” to go into effect. This wasn’t Plan A, or even Plan B, for either side.
As the politicians look for a way forward, conservative lawmakers say that new budget projections make their case for them. Federal tax revenue is forecast to hit a record $2.7 trillion this year, according to the Congressional Budget Office (CBO).
Might $2.7 trillion in revenue have anything to do with the laconic pace of economic recovery?