jump to navigation

The White House’s FY2017 Budget: Deficits February 11, 2016

Posted by geoff in News.

Yesterday we saw that the government spending was going to increase to over 22% of GDP and seemed to be continuing upward. You might well ask what that bodes for deficits. Well, it turns out that the White House is not projecting a significant increase in deficits – only about 2.5% in the future:


The only way this can be true is if they’re projecting a lot of revenue, which they are:


So their master plan will succeed if they can steal collect 20% of economic output. Now, if we had the crazy dot-com economy of 1998-2000 where capital gains tax revenues went through the roof, that just might work out. But so far as I know, the only realistic way they can generate this is by cranking up taxes.

Which is what they plan to do, with the single biggest revenue generator being an increase in the peak capital gains tax rate from 20% to 24.2%. Of course they never factor in the negative effect on investment that will cause, which will hamper GDP growth. So in the end, the deficits will be much larger than what they forecast.

As usual.


1. Patrick - February 12, 2016

1) They’ll spend their way out of the recession!
2) All that spending and the poor will get poorer and the middle-class will become damn-near poor.
3) All this will result in more young adults voting Democrat (for reasons that boggle my mind)
4) Repeat from point #1

2. geoff - February 12, 2016

All spirally and doomy.

3. geoff - February 12, 2016

They’ll spend their way out of the recession!

…and as always, you get more of whatever you spend your money on. When Reagan spent on defense, we got more manufacturing, engineering, and defense. When Obama spent on the poor, we got record numbers of people on food stamps.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: