The lead paragraphs to Thomas Hungerford’s “Let’s Face It – We’re Far From Broke“:

The relationship between tax policy and spending policy in the United States has changed dramatically over the past 200 years (Ippolito 2012). Kimmel (1959, 7) notes that for the first 140 years, “federal budget policy was concerned mainly with the money costs of government and raising the revenues to meet them.” In recent years, only one of the two major political parties continued to view fiscal policy this way. Democratic proposals for spending increases or tax cuts have routinely been “paid for” with new revenue sources or by offsetting spending reductions.¹ For Republicans, however, tax and spending decisions appear to be developed in isolation from one another and with little regard to any impact on deficits and federal debt, with both tax cuts and spending increases unaccompanied by financing sources undertaken during Republican administrations. When Republican policy makers do pay attention to deficits, they tend to focus only on the spending side of the budget. For example, House Speaker John Boehner (R-Ohio), speaking for many in the GOP, argues, “Washington has a spending problem. Let’s face it—we’re broke” (Boehner 2012).

This is clearly wrong. While the federal government is projected to run deficits far into the future, the U.S. economy is projected to generate substantial amounts of income growth far into the future. This means the real fiscal challenge is simply the political problem of raising revenues that are sufficient to meet our spending needs. Indeed, the Constitution (Article I, Section 8) provides Congress with the power to raise revenue “to pay the debts and provide for the common Defense and general Welfare of the United States.” This issue brief examines our nation’s fiscal situation and identifies what the real challenges on the spending and revenue sides are….