Read More »"/> Read More »"/>
Stanford’s John Taylor has produced an invaluable chart for visualizing the difference between the House and Senate budget proposals, which is really what the debate about raising the debt ceiling and the partial government shut down is about:
He describes the information visualized in the chart and provides his two cents:
The chart shows the recent history of federal outlays along with the path of outlays as a percentage of GDP under the Senate proposal and under the House proposal. There is a big difference in these two paths. Spending gradually comes down to pre-crisis levels as a share of GDP under the House plan and remains high under the Senate plan. I have been arguing since 2009 that undoing the recent spending binge is a reasonable goal, and prefer the House version on that count.
The Senate budget would also tax more than the House budget by .7% of GDP and run a deficit larger than the House budget by 2.1 percent of GDP, where the percentages are based on 2023. In my view the House proposal is superior on these two counts as well, especially given that taxes have already increased and the debt is continuing to explode.
Speaking of national debt continuing to explode, you just need to see the charts here to understand the reasons why.
Between now and January 15, 2014, the last day that the U.S. government can remain fully open under the terms of the agreement that ended the most recent debt ceiling debate before having to partially shut down again, the House and Senate budget committees will need to reconcile the difference between these two very different proposals.
In case you’re wondering whatever happened to President Obama’s Fiscal Year 2014 budget proposal, it has pretty much fallen by the wayside. He wanted to spend even more money than what is in the Senate’s budget proposal.
Now, it’s just a matter of deciding where the line for spending will actually be drawn.