“In the first seven years of the Bush administration, nominal GDP grew from $9.8 trillion to $13.8 trillion, but growth in federal financial commitments outpaced even that strong performance. Accordingly, whereas in 2000 the government was on the hook for $29 trillion of guarantees (implicit and explicit), insurance obligations, and projected future payments to Medicare and Social Security recipients, now the grand total of such guarantees, obligation, and projected payments is more than $67 trillion.”

From James Grant in the November/ December 2008 issue of Foreign Policy “After the Crash- Helping the U.S. Economy Right Itself.”

HKO comments- the controversial Bush tax cuts increased revenue just as they did under Reagan, but the increased revenue was more than spent.

Obama must face sharp spending cuts, not exactly a cornerstone of his campaign. Whether you call it a tax increase or “letting the tax cuts expire”, increasing taxes will only make the deficit worse.