Elections Have Consequences … So Do Demographics

WSJ today. What America voted for. [emphases mine]

The Hard Fiscal Facts

Individual tax payments are up 26% in the last two years.

While the rest of America was holding an election last week, the gnomes at the Congressional Budget Office released the final budget totals for fiscal 2012. They’re worth reporting because they illuminate the real fiscal choices that confront the country, as opposed to the posturing you’ll be hearing over the next few weeks.

The nearby table lays out the ugly details. The feds rolled up another $1.1 trillion deficit for the year that ended September 30, which was the biggest deficit since World War II, except for each of the previous three years. President Obama can now proudly claim the four largest deficits in modern history. As a share of GDP, the deficit fell to 7% last year, which was still above any single year of the Reagan Presidency, or any other year since Truman worked in the Oval Office.

Tax revenue kept climbing, up 6.4% for the year overall, and at $2.45 trillion it is now close to the historic high it reached in fiscal 2007 before the recession hit. Mr. Obama won’t want you to know this, but this revenue increase is occurring under the Bush tax rates that he so desperately wants to raise in the name of getting what he says is merely “a little more in taxes.” Individual income tax payments are now up $233 billion over the last two years, or 26%. 

This healthy revenue increase comes despite measly economic growth of between 1% and 2%. Imagine the gusher of revenue the feds could get if government got out of the way and let the economy grow faster.

Now let’s look at outlays, which declined a bit in 2012. That small miracle was achieved thanks to a 4% fall in defense spending, a 24% fall in jobless benefits, and an 8.9% decline in Medicaid spending.

Note, however, that federal spending remains at a new plateau of about $3.54 trillion, or some $800 billion more than the last pre-recession year of 2007. One way to think about this is that most of the $830 billion stimulus of 2009 has now become part of the federal budget baseline. The “emergency” spending of the stimulus has now become permanent, as we predicted it would.

When Beltway politicians claim they want a “balanced” approach to reducing the deficit, what they really mean is raising taxes to finance this new higher spending level. And the still-higher level that is coming with ObamaCare.

The reality is that the fastest way to raise revenue is with faster economic growth. To the extent that raising tax rates will reduce the rate of growth, it will slow the flow of tax revenue and increase the deficit. 

Even if Mr. Obama were to bludgeon Republicans into giving him all of the tax-rate increases he wants, the Joint Tax Committee estimates this would yield only $82 billion a year in extra revenue. But if growth is slower as a result of the higher tax rates, then the revenue will be lower too. So after Mr. Obama has humiliated House Republicans and punished the affluent for the sheer joy of it, he would still have a deficit of $1 trillion. 

Most of our readers know all this, but we thought you’d like some new evidence to rebut the kids who voted for your taxes to go up when they return from college for Thanksgiving. Maybe they’ll figure it out when they have a job, if they can find one.

 My view, FWIW: The GOP ought to vote “Present,” let Obama and Reid pass all the stuff they want and just get out of the way. Maybe by 2014, when Obamacare has kicked-in, we have 2 years of the coming recession (Depression?) under our tightening belts, no college grad can find a job, California is utterly bankrupt on the policies Reid/Pelosi/Obama demand we impose on the rest of the nation – and we look like Greece … only worse – and NO one can bail us out…. maybe THEN the country will awaken and vote-out the spenders… if it isn’t already too late.  I mean it isn’t as though Obama will accept anything other than his Progressive ideology of taxing the wealthy in to the poor house anyway, and it isn’t as though the media or anyone else will educate the takers that, once everything has been taken and the rich have all retired or gone belly-up themselves, there won’t be anything left TO take and they’ll be starving in the streets. I mean, it’s gonna happen anyway – with or without GOP votes, right, and we’re gonna be more broke then than we are now, right? Why let Dems put ANY of the blame on the GOP? So, just let it happen and let the Dems OWN it.

But people DO need to keep one thing deeply in mind. Demographics. Democrats DON’T HAVE CHILDREN. Not in Blue States. Not in Blue Nations. Not anywhere. Greece, Spain, etc., are about demographics: If you don’t have kids to pay into the Ponzi pot  that all Western entitlements are, pretty soon you run out of what WAS in the pot – and you are Greece. Well, Democrats in only 3 states (2008 election, 2010 census) are at (NM, NV) or above (HI) 2.1 fertility (flat). ALL other Blue states, even CA for the very first time, and ALL  Blue nations (europe, Japan, etc.) are below replacement fertility. ALL.

The fiscal crises hitting the West are about fertility, not taxes or spending – those only are symptoms. And America is not immune… Social Security would be just fine if we had a fertility rate of 3.0, or, likely, even 2.5.



Every time – EVERY TIME- you hear a Democrat yammer about the future and “the children,” you need to keep in mind that Democrats don’t care about that future enough, even, to populate it: THEY DON’T HAVE CHILDREN. They are passing taxes YOUR kids are going to have to pay, NOT THEIRS, and that YOUR kids are going to have to pay – in ever-increasing amounts.


About Alex Scipio

About Alex Scipio: Alex moved out of the People's Republic of California to the Free State of Arizona, finally tiring of the lack of the Bill of Rights, the overgrown idiocracy, and the catering to non-Americans & welfare recipients. He still wonders how America got from Truman, Eisenhower, and Daniel Patrick Moynihan to the Liberal and Conservative extremes so badly managing America today. And, yes, islam DOES need to be annihilated. And doing what he can to get folks away from the extremes of political life.
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