The 18.1 percent line represents the amount the federal government has been able to extract from the economy for the past 50 years prior to this administration. Regardless of the top marginal tax rate - as high as 92 percent and as low as 28 percent - we collect 18.1 percent on average. We’ve only exceeded 20 percent of GDP four times in that 50-year period. During that same 50 years the federal government has spent 20.2 percent of the size of our economy. We have basically locked in a 2.1 percent structural deficit.
Since we hit the housing crisis, we entered a recession. When you hit a recession, income levels drop and tax collection also declines. Our tax revenue declined to 15 percent of the size of our economy. President Obama decided that the solution to the problem was to grow government, so he proposed an $800 billion dollar stimulus. He also enacted the healthcare law - a government takeover of 1/6 of our economy - and then passed the Dodd-Frank financial regulation bill. Those policies grew government from the 20.2 percent average to 25 percent of our economy in 2009. We are looking at growing government as a percentage of our economy to 35 percent by 2035. This is simply unsustainable.
Video courtesy of Chippewa Valley Community Television.