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Real World Economics– A Web Site that Exposes the Truth About Economics (by George H. Blackford PhD)

2016-02-22

We live in a country in which many people, if not the vast majority, hold beliefs about the federal budget that are demonstrably inconsistent with the facts that exist in the real world. The extent to which this is so is easily seen by considering how many people would be surprised to discover that the size of the federal budget as a fraction of our economy—that is, as a percent of gross domestic product (GDP)—in the 2000s was about where it was in the 1970s and was actually slightly smaller in 2000 and 2001 (17.6%) than it was in 1961 through 1964 (17.8%-18.2%). How many people would be shocked to discover that there were more federal government employees in 1967 (2.85 million civilians plus 3.45 million military) than there were in 2013 (2.77 million civilians plus 1.53 million military)? How many would also be shocked to find that federal employees as a fraction of the civilian labor force has fallen by more than 50% since the 1960s? And how many know that Americans are one of the least-taxed people among the advanced countries in the world?

These are all simple and easily verifiable, real-world facts that most people would find almost impossible to believe given the deluge of disingenuous, antigovernment rhetoric that is designed to encourage us to believe otherwise.

The above is the introduction to a web site that is produced by George H. Blackford, Ph.D., who calls himself an economist at large.  The site contains an enlightening series of lessons about recent economic history and an excerpt from a book that Dr. Blackford has written called “Where has all the Money Gone?”  The excerpt from the book goes through the history of the American economic situation since about 1913 (when comprehensive statistics began to be kept.)  Much of the detail should be familiar to those who have been following this blog as well as those who have been reading the columns of Dr. Paul Krugman.  The bottom line is that we are spending less per person and we have fewer employees per citizen than we have had in years past, and we are paying even less in taxes than we have in years past.

For those who have not been following along, this site will give much-needed information about how and why we got into this mess, and why the Republicans (as well as many Democrats) are liable to make thing even worse than they are already.  One significant point: “Federal Outlays relative to the size of the economy in 2013 (20.8% of GDP) were below where they were in 1980 (21.1% of GDP).”  In other words, Reagan was responsible for much of the disaster that has befallen us; Clinton is responsible for another part, by deregulating financial markets in 1999.

Dr. Blackford’s thesis, supported by many, many numbers, is that we must increase taxes in order to balance the budget.  There is no way to cut services or reduce spending, by cutting programs or by reducing fraud and waste, or by any other sleight of hand.  Any reduction in the budget, by cutting services, will hurt someone who desperately needs help or put someone out of a job.  The only mature way to run our government without hurting citizens is to increase taxes, and the only mature way to increase taxes is to do raise taxes on the well-to-do.

I won’t make the effort to justify Dr. Blackford’s conclusions because he does such a good job of laying them out in a straightforward way.  Read his website if you have any doubts.

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