Wednesday, February 10, 2010

TILB Depressing Chart Of The Day: Government Spending As A Percent Of GDP

This basically speaks for itself. It is all government spending: federal, state and local. The data series can be found here.

Another way to think of this is that 45% of your productive effort goes to supporting The State. While you may say, "but that's impossible because the sum of the average tax rate we pay doesn't get to 45%", then you just figured out what government borrowing allows for.

Paying off that debt (without defaulting) means one or a combination of higher explicit taxes, higher implicit taxes (money printing), or massively reduced government spending in the future. Guess which one of these is unlikely.

If you just vomited in your mouth and subsequently swallowed it, you're not alone.