Federal government revenue is 85 percent funded by income taxes and payroll taxes for social programs such as Social Security, Medicare and unemployment insurance.
Federal revenue did not experience a reduction as a result of tax law changes that went into effect in January 2018. Total revenue increased in each of the two fiscal years since the law passed.
For perspective, in the 60 years since 1959, federal government revenue has increased every year from prior years except in 1971, 2001, 2002 and 2003. In 1971, there was a short deep recession, and 2001-2003 was the aftermath of the near financial collapse of 2000.
In the last 20 years, the federal government’s annual revenue has increased 89 percent, from $1.82 trillion in 1999 to $3.44 trillion in 2019.
Over that same 20-year time frame, federal government spending increased 266 percent, from $1.701 trillion in 1999 to $4.529 trillion in 2019.
With expenditures increasing exponentially faster than revenue, this could realistically lead to a more pervasive and long-lasting financial collapse than the one that occurred 20 years ago.
And yet, in this federal election year, none of the candidates running for congressional seats or the presidency have acknowledged this looming fiscal implosion. Nor, of course, proposed remedies.
We can lament and quibble about who and how we got here, but that won’t mitigate the issue.
Our best prospects are to vote for candidates who will commit to fiscal prudence.