deficit question: do we have a revenue problem or a spending problem?

[Davros]

Both. We would be in better shape if the Bush tax cuts had never been passed. They were unnecessary.

[jotacar]

Why do you think that it must be one or the other?

The most sensible way to deal with a deficit is to increase revenue *and*
decrease spending.

Anyone who tries to insist on only one or the other is either a moron, or
is brighter than a moron, but failing to use all of his or her intellect.

(Yes, clever people sometimes think in a stupid fashion. Political ideology
does that to those on both the Left and the Right. Their politics overcome
their good sense. Did you not listen to some of the debates among the
candidates for the Republican nomination? Those people often sounded like
idiots, and no one would call them stupid. Just politically demented!)

((I've just read some of the comments offered above by "smaller government"
advocates. They illustrate beautifully the manner in which otherwise fairly
intelligent people can go off a cliff of their own, because of their blind
adherence to some political position or another.
Without exception, they are people who would not willingly give up a single
government benefit that they receive personally. Investigate, and you'll
find that they are all for cutting off benefits and services that OTHERS enjoy!
They can go to h*** and take their selfishness with them.))

[TK]

We have a spending problem because of a Republican-forged tax policy and a bi-partisan forged free trade policy. It is the combination of supply-side economics that promotes ever lower income tax rates on unearned income, the tax savings from which neither trickle down to the middle class in the form of jobs nor to the federal government in the form of enhanced tax revenues from increased economic activity, and trade policy that creates incentives to shut down businesses based in America which provide good middle class jobs and outsource that production to slave wage countries like China and Mexico (which also have little to no government regulation pertaining to worker or environmental safety, for example) and then export those products to America, and other countries,without fear of tariffs being imposed by those governments and without fear that domestic competitors in those countries can even come close to matching the low prices set by the distributors who sell these products, which guarantees market share and enormous profits for these distributors.

The ultimate cost borne from pursuing these policies is a loss of well paying middle class jobs that provide workers and their families financial self-sufficiency during the pre-retirement and post-retirement periods of their lives while depriving the state and federal governments of the income taxes and payroll taxes these jobs would normally generate thereby reducing normal public sector spending and investment, certainly at the state and local levels since their budgets must always balance and borrowing is thereby constrained, and also by jeopardizing the sound financial footing of such programs as Social Security and Medicare.

Fewer and fewer well paying 40 hour per week private sector jobs means a lower standard of living for more and more working Americans. It also means state and federal tax revenues automatically shrink and that means either LESS public sector spending and investment in the economy or MORE deficit spending that must be paid back with interest later, each of which alternative creates either economic uncertainty or fiscal instabity in the future. Or else it creates political pressure to increase tax rates on ordinary income earners, because unearned income is sacrosanct, and higher taxes paid by ordinary income earners necessarily decreases aggregate consumer purchasing power which can, unfortunately, be forestalled temporarily by pursuing unsound monetary policies that create cheap money and easy credit and which ALWAYS lead to an asset bubble that must inevitably burst causing harm, and sometimes enormous harm, to either the financial economy or the real economy, or both.

When that bubble bursts, as it did at the end of Bush-Cheney, the most Keynesian administration in America's history, then you experience an even more pronounced state and federal tax revenue insufficiencies, since economic activity contracts, from which you can only escape by increasing deficit spending intelligently while reforming tax policy and trade policy as soon as circumstances permit. Of course there must also be a political consensus and political will to make necessary changes to tax and trade policy and to curb unnecessary spending which, in America anyways, is almost exclusively military spending. Until that consensus emerges from the executive and legislative branches of the federal government, the underlying problems cannot be solved even though real solutions to those problems exist.

Okay? Are you satisfied with a non-simplistic answer to your question?