Economics, Pethokoukis, Taxes and Spending, U.S. Economy

3 things account for 85% of higher government spending over the next decade

Federal spending is projected to rise by $2.3 trillion over the next decade, according to CBO. That average annual increase of 5.2% will help take the US debt/GDP ratio from 72% last year – and just 35% in 2007 – to 77% in 2024. This is key: just three parts of the budget account for 85% of that increase. read more >

Pethokoukis, Economics, Taxes and Spending

Can we please agree that workers probably bear some of the corporate tax burden? Science!

When economist try to model how corporate income taxes work in the real world, they find that Mitt Romney was right when he said, “Corporations are people, my friend.” Some chunk of the tax burden, perhaps a rather large chunk in the 40% to 75% range, falls on workers. Cutting the tax might just raise worker wages. read more >

Economics, Pethokoukis, Taxes and Spending

Can we really ax all those federal departments and agencies? Actually, we kind of are already

National Journal reporter Jason Plautz goes through the ins and outs of cutting a bunch of federal departments and agencies including Agriculture, Commerce, Energy, Education, and the Small Business Administration. Total annual discretionary spending in just the 11 Plautz mentions works out to about $300 billion a year. Generally I find this way of thinking quite appealing. But no one should fool themselves into thinking that slashing this sort of spending will solve America’s long-term budge woes. read more >