It might be economically impossible to pay for Obama's budget 

A lot of people these days are writing or saying that we're not really broke. Underlying this argument is the notion that we can tax rich people some more. Nick Gillespie at Reason lays out some facts about this belief, and how it ties into Obama's budget:

Obama is projecting an unsustainable level of revenue that still won't come close to matching outlays. Since 1950, total federal revenues have averaged 17.8 percent of GDP. There has been only one year when it exceeded 20 percent of GDP (and only two years when it reached 20 percent). Yet Obama says that's where we're headed.

Obama's budget foresees the government taxing 20 % of GDP and spending 23 percent of GDP. That means if we spend as much as Obama wants, we would be increasing our debt every year, unless Washington could somehow get 23 percent of GDP through tax receipts. This might not be impossible, but history shows that no matter how much you tax the rich, 20 percent is a stretch and 23 percent is impossible without some major change to our tax system -- like adding a value-added tax (VAT).

Here's the chart, with data from the Tax Policy Center and the White House:

 

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Timothy P. Carney

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