Just how bad is it that the the government is running a $1.4 trillion deficit? Worse than you think, says Politics Daily's Joanne Weiner. First she puts together a running tab of the government's yearly expenditures: TARP, Cash for Clunkers, extra spending on unemployment benefits, Medicaid and so on. Then she looks at the government's withering revenue sources, noting with horror that corporate tax revenues are down more than 50 percent. While Weiner concedes that spending is needed to revive the economy, she is mortified by what kind of taxes it would take for the government to pay for its gargantuan budget. Think about it:
If the administration and Congress wished to eliminate the current deficit, it would have to raise tax rates to unprecedented levels. Assuming no other changes in the tax law, the minimum tax rate would increase from 10 percent to 27.2 percent while the maximum tax rate would rise from 35 percent to 95.2 percent.
While no one believes that Congress would actually try to close the deficit in one year, these figures show in stark terms what is so bad about amassing such debt.