Clive Crook writes in Bloomberg: "Republicans want lower taxes and lower spending. Democrats want higher spending and higher taxes (on companies and the rich). How to strike a deal? Easy. Cut taxes and raise spending – hence higher borrowing." That sounds like it makes sense, but when you look at the numbers over the past few decades the pattern actually doesn't empirically hold up.
The higher borrowing has been driven almost entirely by higher spending, not by lower taxes. Tax revenues have increased, even when tax rates have declined. Big picture, rounded numbers: In 2000, the government took in $2 trillion, spent $1.8 trillion, and had a $200 million surplus. In 2010, the government took in $2.2 trillion, spent $3.5 trillion, and had a $1.3 trillion deficit. In 2020, the government took in $3.4 trillion, spent $6.6 trillion, and had a $3.1 trillion deficit. The estimate for 2023 is that the government will have taken in $4.8 trillion, spent $6.4 trillion, and have a $1.6 trillion deficit. These are all "current dollar" numbers from the White House Office of Management and Budget.
From 2000 to 2023, revenue went to $4.8 trillion from $2 trillion, while spending went to $6.4 trillion from $1.8 trillion. Taxes more than doubled, while spending more than tripled. You can talk about inflation, you can talk about the war in Ukraine, you can talk about the pandemic, you can talk about interest rates raising borrowing costs, you can say you need to look at constant dollars or at percent of GDP...whatever. What's happened to the U.S. federal budget over the years 2000 to 2023—is not a "cut taxes and raise spending" story. It's a "raise taxes and raise spending even more" story.
