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

Revenue being a low % of GDP during a recession is a good thing

[(Anonymous)]

Economists use the phrase "automatic stabilizers" to refer to the tendency of tax revenues to fall faster than the economy (in part because of the progressive income tax) and spending on programs like unemployment compensation to rise as the economy declines. Unlike "stimulus" bills which are often designed to be the starting point of long term programs, automatic stabilizers provide stimulus in a way which will automatically expire as the economy rebounds.

Re: Revenue being a low % of GDP during a recession is a good thing

[telnar.livejournal.com]

That was me, btw -- I noticed after posting it that I wasn't logged in.

Re: Revenue being a low % of GDP during a recession is a good thing

[rowyn]

It's okay, I could tell it was from you. :D Although having you signed in does make it easier to reply. Anyway, the "automatic stabilizers" is good to hear, since I was wondering how much of the drop was from "tax credits" getting treated as a decrease in revenue instead of the wealth-transfer spending that they really are. :/

Re: Revenue being a low % of GDP during a recession is a good thing

[telnar.livejournal.com]

Tax credits are a part of that number, but a smaller part than the inherent counter-cyclical pieces of the tax code. For an example, visualize how much the capital gains tax would collect in 2009.