John Boehner is Right: "The Talk About Raising Revenue is Over."

Over the weekend, Speaker of the House John Boehner (R-Ohio) appeared on ABC News' This Week. His big quotes included this one about the government's balance sheet:

“We do not have an immediate debt crisis,” Boehner said on ABC News’s “This Week With George Stephanopoulos.” “But we all know that we have one looming.  And we have — one looming — because we have entitlement programs that are not sustainable in their current form. They’re gonna go bankrupt.”

I'd quibble with Boehner a bit on this. Maintaining a gross national debt greater than 90 percent of GDP - something the government has done since the finanical crisis in 2008 - is a clear drag on current and future economic growth. As Carmen Reinhart, Vincent Reinhard, and Kenneth Rogoff have shown, such "debt overhang" for five or more years corresponds with long-term reductions in economic growth:

When accumulated gross debt exceeds 90 percent of a country’s total economic activity for five or more consecutive years - reduce annual economic growth by more than one percentage point for decades.

Over 20 years, [Reinhart, Reinhart, and Rogoff] write, there can be a “massive cumulative output loss” that reduces gains by 25 percent or more. The U.S. went over the 90 percent threshold after the 2008 financial crisis. At $16.3 trillion, our current gross federal debt represents more than 100 percent of 2012’s total economic activity or gross domestic product.

mercatus.orgmercatus.orgThat may not constitute an "immediate" debt crisis, but it's one that demands immediate and serious attention from both parties - not the phoney-baloney long-term spending plans put out last week by both the Republicans and the Democrats. Neither of these is a serious attempt to rein in long-term spending that is behind our mounting debt levels. The GOP wants to increase spending by 42 percent over the coming decade while the Dems call for 58 percent more spending. (Read more details here and here.)

However, Boehner said something that set off the chatterati that is absolutely, unequivocably accurate when it comes to taxes for next year:

“The talk about raising revenue is over."

Give the speaker credit for hitting the nail on the head. Both the House Republican and Senate Democratic budgets agree that in fiscal year 2014 the federal government will have raise $3 trillion from all sources of revenue. The budgets differ on the amount of spending they propose: The GOP wants to spend about $3.5 trillion in 2014 while the Dems want to spend $3.7 trillion.

As the budget season gets underway, it's is worth hammering home a few things. First and foremost, despite containing projections for a 10-year "budget window," annual budget documents are only really about one fiscal year - in this case, 2014. The decade-long projections are nice but are in no way binding and are mostly used to score ideological points, not guide actual governmental behaviors. Second, both parties agree on how much revenue the government will generate in 2014. Third, they differ on spending by just $200 billion - a huge amount, of course, but a small fraction of budgets that approach $4 trillion.

The federal government has gotten used to operating without an actual budget that has been worked out through the normal legislative process. That has actually been good for restraining spending - it's hard to boost spending under a series of continuing resolutions. But it is a sign of a very basic level of incompetence that can't and shouldn't go on indefinitely (and note that this is irresponsibility, not gridlock - Congress has a knack for getting shit done when they really want to). Uncertainty gives ulcers to Rhesus monkeys and it's not good for long-term economic growth - which is already staggering under excessive debt.

But Boehner is right that revenue for next year - the only year under actual discussion in the 2014 budget - is a settled matter. All that should be left to discuss is how much the feds plan to spend. And even there, the difference is little more than a grandiose elaboration of petty differences.

Maybe after Boehner, Reid, Obama, et al. hash that minor disagreement out, they will actually start dealing with long-term drivers of debt and the weak economic growth that piling on trillion-dollar deficits tends to engender.

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  • Almanian!||

    Maybe....Boehner, Reid, Obama, et al...will actually start dealing with long-term drivers of debt

    HAAAAAAAAAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA

    *breath*

    HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA!!!

  • Palin's Buttplug||

    Of course they won't.

    The long term drivers are programs for the elderly - the Third Rail of politics.

  • Libertarius||

    You probably have a degree in welfare bumology and this is the best you can come up with?

    Earth to buttplug: the welfare state is YOUR baby and all your alleged "progress" of the 20th century is going to collapse under its own dead weight.

  • Palin's Buttplug||

    My Baby? You're an idiot.

    I voted Reagan in 84, LP until 2004, Obama in 2008 - the last two partly as an objection to the Bush Part D welfare program.

  • John||

    Bullshit Shriek. You were on here as Shrike in 04 shilling for John Kerry. Shut the fuck up.

  • Palin's Buttplug||

    I posted here for the first time in 2007, you jackass.

    And I said "until 2004".

  • John||

    You have been plaguing this blog much longer that that.

  • wareagle||

    so you were moved to change because of Med Part D but did not following Obamacare? That makes zero sense on this planet; maybe on yours, this illogic works.

  • KDN||

    Well, Obamacare at least raised our taxes. That makes it a lot better.

  • ||

    While you are completely correct, the blame will be placed at the feet of teh KORPERASHUNS and the voter will double down on gubmint.

    Stupid cannot be fixed.

  • Rasilio||

    Actually Stupid usually can be fixed, simply make sure people face the full consequences of their stupid, they tend to learn pretty quick.

    The problem we are having is the welfare state insulates them from the worst of the consequences they face from their stupid allowing it to grow and fester.

  • The Late P Brooks||

    The decade-long projections are nice but are in no way binding and are mostly used to score ideological points, not guide actual governmental behaviors.

    SRSLY?

  • The Late P Brooks||

    it is a sign of a very basic level of incompetence that can't and shouldn't go on indefinitely

    But- finest minds! public service! selfless devotion!

  • wareagle||

    "As the budget season gets underway, it's is worth hammering home a few things."

    why? The only thing to be hammered home is the malicious truth that neither side gives a damn about spending beyond its ability to use it as a campaign cudgel against the opposition.

  • R C Dean||

    Why does Boehner saying "no new taxes" remind me of a general manager saying the coach has his full support?

  • John||

    Just because he acknowledges reality, doesn't mean he likes it. I have no doubt he would love to raise taxes through the roof in some kind of grand bargain with Obama. But the political support isn't there. People really took it in the nuts with the tax increases that hit the first of this year. No way are you getting more through the house.

  • John||

    The Republicans actually managed to stick it to Obama on this. Obama won the election. He was going to get some tax increases. So they gave him some on the fiscal cliff deal. And now he is fucked. He can't get anymore. And his free shit coalition can never be satiated at current tax rates.

  • wareagle||

    And his free shit coalition can never be satiated at current any tax rates.

  • R C Dean||

    Still attributing the 2009 spending in its entirety to Boosh in the chart, I see.

  • Palin's Buttplug||

    So does the CBO.

    Get over it, RC. Bush was awful and you can't perfume that turd.

  • John||

    Just because Obama was President for the entire year and the Dems controlled both Houses of Congress doesn't mean Bush isn't responsible.

    Jesus Christ you are a dishonest idiot. Don't you get tired of sucking Obama's cock. I think he might actually be tiring of you sucking it.

  • Palin's Buttplug||

    It is for the fiscal year, idiot. Which began on Oct 1, 2008.

  • John||

    Which continued right through October of 09. What, Obama couldn't undo any of that spending? You really do like the taste and smell of your own shit. We rub your nose in this little pile of shit over and over again and you keep dropping it on the floor. -

  • John||

    And most of that increase in spending was the $900 billion porkulus bill that Obama passed. Really, just go die. You are doing nothing but taking up space.

  • Adam330||

    And how many regular appropriations bills did Bush sign for FY09?

    Answer: 3.

    How many did Obama sign?

    Answer: 9, plus ARRA.

  • Red Rocks Rockin||

    And Obama added another $400 billion onto the budget Bush submitted.

    http://www.nbcnews.com/id/29632177/

    Bush was responsible for the majority of the spending that year, not all of it.

  • R C Dean||

    I'm just saying that it dishonest and misleading to attribute to Bush bills that were passed after he left office.

    And that the chart would be easy to fix: for 2009, red up to the level of spending signed by Bush, blue above that.

  • Palin's Buttplug||

    They are not. The CBO report is from Jan 2009.

  • John||

    So it doesn't represent the actual spending and doesn't include the porkulus bill that Obama passed in the spring of 09. So the report is as worthless as you are.

  • Smilin' Joe Fission||

    Pretty accurate analysis.

  • R C Dean||

    Why are you talking about a CBO report when the chart is based on OMB data?

  • Lord Humungus||

    derps gotta derp.

  • Red Rocks Rockin||

    Because official government data is shrike's kryptonite.

    I see this happen with a lot of lefties--they masturbate to CBO reports when the official government data contradicts their assertions. One dumbass I was arguing with asserted that Obama signed $4 trillion in spending cuts into law--after I showed him Obama's 2013 budget, which showed no planned decrease in spending and a deficit no lower than $575 billion, he had no response.

  • califernian||

    “The talk about raising revenue is over."

    Good. Can we talk about reducing revenue now?

  • Smilin' Joe Fission||

    Aye aye

  • Fist of Etiquette||

    Those poor monkeys.

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