Supporting my contention that individual Americans will grow the economy almost no matter what our federal government does, a WSJ Review and Outlook looks at “The Hard Fiscal Facts“. “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.” That’s no surprise since the president remains in office based on liberal spending and the resulting good will of the people. Federal spending is at “about $3.54 trillion, or some $800 billion more than the last pre-recession year of 2007.”
However, look at this, tax revenue still increased, “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….Individual income tax payments are now up $233 billion over the last two years, or 26%.” Not bad, America. Those inclined to prosperity manage to prosper despite low economic growth and high unemployment. No wonder people do not take Republican gloom and doom about the economy seriously. But consider this, the government stalemate of the last two years, with a recalcitrant Congress restraining the President, may have done more to increase tax revenues than any increase in tax rates would do.
The bad news is that what was “stimulus spending” is now expected spending. Going forward, there is the promise of even more spending to come through Obamacare and other election promises. We must figure how to handle that, the worry being that the president’s proposed tax rate increases could kill the current actual tax influx. However, look at what we have. The people returned to Congress a Republican majority, all of whom ran on promises to restraint government spending. This, while returning a president and senators committed to increasing spending. What the people elected was political drama. Right now, that’s good news. They can argue and America can get along with its business.