What' your time period?
2000 to current budget proposal.
Yes its nominal dollars, but so are the dollar figures for the estimated effects of the tax changes, so it makes for better comparisons, also real dollar figures are not readily available. Also inflation has not been high over this time frame.
I can give a simple real dollar figure by just running the current budget proposal through an inflation calculator comparing to 2000. Doing so gives me $3tril, rather than $3.8tril. So the real increase has been about two thirds (rather than over 100%), with the real per-capita increase somewhere in the neighborhood of 60%.
There are disincentives and distortions from budget deficits also... maybe more.
Avoiding the extremes (which may not apply now if you consider the current deficits as being the extreme, but if they are they probably would still be so without the tax cuts, since most of the deficit increase is due to much higher spending), then either
1 - People overwhelmingly consider the current budget situation only and don't look at high deficits as a sign they will have higher taxes in the future - Then the distortions and disincentives from deficits would be less than those from higher taxes. They take just as much money from the private sector (through borrowing, rather than taxing), but borrowing doesn't involved the complexities of the tax code, doesn't make people jump through hoops to get some of their money back, doesn't involve the avoidance and evasion issues.
or
2 - Ricardian Equivalence - People do look at today's huge deficits, and figure it can't last, that the bill will come due and they will be paying it - and so look at current spending as future taxes (and future taxes through our complex and distortive tax scheme rather than some idealized simple tax system), then the disincentives and perhaps the distortions would be just as large, possibly more if they see fiscal collapse as a reasonably possible scenario, but than the whole idea of stimulus pretty much falls apart. |
