Pet Peeve

[rowyn]

Reporting on the US federal gov't's deficit always talks about the raw numbers: ($1.35 trillion!) Sometimes it mentions percentage of GDP (9.2%!)

It hardly ever talks about government income.

I get the feeling that government income generally goes up and down in a way that has very little to do with raising or lowering taxes, and a great deal to do with whether or not the economy is booming. But I don't really know, because 'how much money does the government receive?' isn't a question reporters are interested in answering. v.v Maybe I'll dig through the CBO's website and see if they can tell me.

Comments

[xthread.livejournal.com]

The recession that started mid-2000 ended quickly with the tax cuts

I think your thesis underestimates the impact of dramatically lowering the federal interest rate in early 2001.

[level-head.livejournal.com]

That certainly had an effect -- and perhaps the magnitude can be judged by the tremendous boom that we're in now as a result of lowering it even further.

In all seriousness, it was one of many factors, but it has not proven to be the way out of recessions. It certainly can contribute, though.

In retrospect, it's strange to remember what business and real estate was like during the Carter years when the rate was several times the current values. For some purposes, the change in rate -- and the rate of that change -- can be as effective as the absolute value.

Reading the news after each drop or rise shows how fired up people get over such changes. And that can have, and does have, a real economic effect.

===|==============/ Level Head

[rowyn]

I can't help feeling that the main thing the rate drop did, both in 2000 and 2007-8, was prop up the housing market. Which can't really be propped up *enough* any more. :/