Perspective on GDP
Much has been discussed about the level and distribution of taxes recently, but as Dr. Walter Williams pointed out in a recent article, what is really important is the percentage of our gross domestic product the federal government takes and spends. In 2017 our GDP totaled about $19 trillion and since government took $4 trillion of that, it means we had 4 trillion less to privately spend and invest. Revenue from taxes was about $3.5 trillion, so the other .5 trillion came from borrowing or inflating our currency, or both.
The federal government has taken about 20 percent of GDP each year since 1960, while spending has exceeded 20 percent for most of those years, so government’s income isn’t the problem, government’s sending is the problem. As a point of reference, from 1787 to the 1920s the federal government didn’t take more than 4 percent of GDP except in war time.
Submitted by Virtual Newsroom