‘The Government in 2020’
The Problem:
More specifically . . .
Spending in 2009, as a percentage of GDP
% of GDP
30
25
20
15
10
5
0
Budget Totals, 2009
% of GDP
30
25.9
25
20
14.9
15
10
5
0
Spending
Revenue
Deficit
-5
-10
-15
-11
Federal Budget Totals, 2009 vs. 1960
% of GDP
30
25
20
15
10
5
Deficit
0
-5
Spending
Revenues
-10
-15
2009
1960
40 Years of Spending, 1969-2008
% of GDP
25.0
20.0
15.0
10.0
5.0
2005
1995
1985
1975
1969
0.0
Spending Set-Point: About 21 Percent
% of GDP
25.0
Average: 20.6%
20.0
15.0
10.0
5.0
2005
1995
1985
1975
1969
0.0
40 Years of Federal Taxes, 1969-2008
% of GDP
25.0
20.0
15.0
10.0
5.0
2005
1995
1985
1975
1969
0.0
Revenue Set Point: About 18 Percent
% of GDP
25.0
20.0
Average: 18.3%
15.0
10.0
5.0
2005
1995
1985
1975
1969
0.0
40 Years of Federal Deficits, 1969-2008
% of GDP
3.0
2.0
1.0
-2.0
-3.0
-4.0
-5.0
-6.0
-7.0
2005
1995
1985
1975
-1.0
1969
0.0
The 40-Year Story: Stability
Spending, Taxes, and Deficits, 1969-2008
% of GDP
25.0
20.0
15.0
10.0
Spending
Taxes
Deficit
5.0
Average: -2.4%
-10.0
2005
1995
1985
1975
-5.0
1969
0.0
Reagan Revolution?
Reagan
% of GDP
25.0
20.0
15.0
10.0
Spending
Taxes
Deficit
5.0
-10.0
2005
1995
1985
1975
-5.0
1969
0.0
Radical Bush? Or “All too Ordinary”?
G. W. Bush
% of GDP
25.0
20.0
15.0
10.0
Spending
Taxes
Deficit
5.0
-10.0
2005
1995
1985
1975
-5.0
1969
0.0
One of These Things Is Not Like the Others . . .
Clinton
% of GDP
25.0
20.0
15.0
10.0
Spending
Taxes
Deficit
5.0
-10.0
2005
1995
1985
1975
-5.0
1969
0.0
Where the Money Went, 1969-2008
Share of budget
0.45
0.40
0.35
Reagan defense buildup
Cold War ends
0.30
0.25
0.20
0.15
9/11
0.10
0.05
0.00
Defense
Social Security
Medicare + Medicaid
Non-Defense Discretionary
The Whole Picture: 40 Years of Spending, Taxes,
Deficits…and Medicare and Medicaid!
% of GDP
25.0
20.0
15.0
10.0
Spending
Taxes
Medicare + Medicaid
Deficit
5.0
-10.0
2005
1995
1985
1975
-5.0
1969
0.0
And Now . . .
And Now . . .
The Future
Obama’s Spending Baseline, 2010-19
30.0
25.0
20.0
15.0
10.0
5.0
2019
2009
2005
1995
1985
1975
1969
0.0
A New Set-Point for Spending?
30.0
Average: 24%
25.0
Average: 20.6%
20.0
15.0
10.0
5.0
2019
2009
2005
1995
1985
1975
1969
0.0
Taxes, 1969-2019 (% of GDP; Obama baseline)
Same Old Set-Point for Taxes (% of GDP; Obama baseline)
Average: 18.3%
Average: 17.6%
Spending, Taxes, and Deficits, 1969-2019 (Obama baseline, % GDP)
30.0
25.0
20.0
15.0
10.0
5.0
0.0
-15.0
Spending
Taxes
Deficit
2019
2009
2005
1995
1985
1975
-10.0
1969
-5.0
The Challenge: Large, Persistent Deficits (Obama baseline, % GDP)
30.0
24%
25.0
20.6%
20.0
17.6%
15.0
18.3%
10.0
5.0
-2.4%
0.0
-15.0
Spending
Taxes
Deficit
-6.3%
2019
2009
2005
1995
1985
1975
-10.0
1969
-5.0
A More Realistic View?
The Concord Coalition’s “Plausible Baseline,” 2010-2019
% of GDP
30.0
25.0
20.0
15.0
10.0
Spending
Taxes
Deficit
5.0
-10.0
-15.0
2019
2009
2005
1995
1985
1975
-5.0
1969
0.0
A More Realistic View?
The Concord Coalition’s “Plausible Baseline,” 2010-2019
% of GDP
30.0
24.7%
25.0
20.6%
20.0
15.0
16.2%
18.3%
10.0
Spending
Taxes
Deficit
5.0
-2.4%
-10.0
-15.0
2019
2009
2005
1995
1985
1975
-5.0
1969
0.0
-8.4%
Unsustainable Spending and Deficits, 2009-2050
CBO “alternative” baseline scenario; percentage of GDP
‘Third-World’ National Debt, 2009-2050
CBO “alternative” scenario; percentage of GDP
Public Debt as a Share of GDP, 1945-2050
% of GDP
350
321%
300
250
181%
200
150
106%
87%
100
Average, 1945-2008: 44%
50
37%
0
1945
1960
1975
1990
2005
2020
2035
2050
The Challenge for Liberals: Seriousness on Spending
Controlling Health Costs is Essential, but Not Sufficient:
Spending, Taxes, and Medicare Plus Medicaid, 1969-2019
(% of GDP, Obama baseline)
2009
The Challenge for Conservatives: Seriousness on Taxes
% of GDP
30.0
24.7%
25.0
20.6%
20.0
15.0
16.2%
18.3%
10.0
Spending
Taxes
Deficit
5.0
-2.4%
-10.0
-15.0
2019
2009
2005
1995
1985
1975
-5.0
1969
0.0
-8.4%