FederalExpenditures Exceed Receipts by More Than One-third

It seems to me that the recent debate over the debt ceiling has treated the enormous amounts involved in an abstract manner.  It is difficult to get one's mind around figures such as $2 or $3 trillion.  We already know that the Treasury took advantage of the increase in the debt level to raise the total outstanding federal debt to more than 100% of the gross domestic product.  That means that the national debt exceeds the revenue generated by the entire economy in 2010.  And yet, because this can be paid off over time, many on the left do not believe we should be concerned about this.

It may be more relevant for some people to compare the deficit to expenditures on an annual basis.  Recently, I heard a radio talk show host announce that, in the latest month, federal expenditures totaled $300 billion, while its receipts totaled $180 billion– in other words, that expenditures exceeded revenues by more than 40%.  The most recent Monthly Budget Review issued by the Congressional Budget Office (August 5, 2011) generally confirms this.  For the first ten months of Fiscal 2011, federal receipts were $1893 billion, while expenditures were $2996 billion. (Or receipts = 1.892 trillion and expenditures = 2.996 trillion).  During this period the deficit was $1.1 trillion.  This means that receipts were only 63.2% of expenditures, or put another way, we spent 58.3% more than we received.  No family could go through life spending 58% more than their income, and this is also true for the federal government.

Looked at in this light, it is beyond my comprehension how anyone could argue that we do not have a massive problem, or that we need not reduce the size of the federal government to solve it.  Since it would not be possible to raise taxes by 58% without destroying the economy, the only alternative is to reduce costs.  I am afraid that, only if we elect a Republican President and Republican Congress, will we be able to do this.