Back On Track

“Have to get the country back on track” and “set a course” is the new buzz words of the GOP presidential contenders. Apparently, “protecting the job creators” and “eliminating the uncertainty”, the daily utterances of Boehner, Cantor, McConnell, and company only work after one has been elected. So all of the wanna-bes have turned to “getting back on track” and “setting a course” when they’re not repealing Obamacare or predicting the outcome of Obama’s 2012 election possibilities. Let’s take a look at the track they feel the need to return. In 1980, revenue fro individual income tax was 9.0% of GDP and corporate tax revenue was 2.4% of GDP. By 2000, individual tax revenue was 10.2% of GDP and corporate tax revenue 2.1% of GDP. By 2010, individual tax revenue was down to 6.2% of GDP and corporate tax revenue was down to 1.3% of GDP. Now, you might say that according to Reagan and his trickle-down/supply side economists, if tax rates were lowered, revenues would increase. There is a difference between theory and practice. What works in theory does not always work in practice. Back to that track? During that same period of time, the top 5% enjoyed an 81.7% increase in their wealth. The next 82.5% barely kept up with inflation as their wealth grew by 25.7%. The bottom 12.5% of the population saw their wealth shrink by 7.5%. For all but 5% of the population, that track seems to lead to the poor house. Want to go back to that track? When it came to income, from 1980 to 2010, the top 10% received 51% of all income while the bottom 90% shared the remaining 49%. Not a track most would want to be back on, is it? If you are a CEO that was a very good track as CEO compensation compared to the average employee went from 35 to 1 to 243 to 1. It is easy to see why a CEO might like that track. In 1980 total revenue was $517.1 billion while expenditures were $590.9 resulting in a deficit of $-73.1 billion. By 1990 revenues were $1,032.7 billion with expenditures $1253.1 and a deficit of $-277.6 billion. In 2000, revenues grew to $2025.5 billion with expenditures of $1789.2 billion resulting in a surplus of $86.4 billion. By the time we get to 2009, revenue is $2104.6 billion and expenditures are $3518.2 billion and the deficit is $-1550.6 billion...the fast track backwards. Revenue has gone from 19.0 percent of GDP in 2000 to 14.8% of GDP in 2009 while expenditures were 21.7% of GDP in 2000 and were 24.7% of GDP in 2009. Get the country back on track they say? Get the country as far from the track as possible seems like a better plan. The track doesn’t appear to be very favorable for the majority of Americans. In fact, the only people who benefited from the “track” were CEOs and politicians, neither group having to worry about long-term retirement, healthcare, or future earnings. To hell with back on track...THE TRACK SUCKS!