Why is goverment debt not calculated as a % of tax revenues instead of GDP?
from fididosooe@lemmy.ca to nostupidquestions@lemmy.world on 22 Aug 19:28
https://lemmy.ca/post/27486416
from fididosooe@lemmy.ca to nostupidquestions@lemmy.world on 22 Aug 19:28
https://lemmy.ca/post/27486416
You can’t use your GDP to pay off debts. Wouldn’t it be better if we used how much % of a goverments budget goes towards servicing debts?
#nostupidquestions
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Because GDP ratio is good propaganda for the ruling class and their government lapdogs.
Plebs asking too many questions about taxes would be bad news
How would debt to revenue be substantially different in this regard?
The ratio would look different and would also be more relatable to the peasants.
revenue for government is = income for the peasant
GDP = ???
with that said, i wonder what would happen if workers found out what their labour actually brings lol Each peasant does have a GDP value
Because the people utilizing debt want to measure it against the largest number they can find… also because, in an extreme situation, the GDP is essentially the value that a government could surrender to creditors.
Nope most of the GDP belongs to private sector.
The government has the force to seize that if they so choose… it’s unthinkable in America because of our liberties but it isn’t in other nations.
Edit: I don’t know why this is being downvoted - it’s called nationalization and it can and has happened with or without monetary compensation to business owners in various times through history… I’m not suggesting uncompensated unilateral nationalization but it has been used for debt relief in the past.
You’re being downvoted because people only think in the context of their own experiences - hasn’t happened to them so it either isn’t that bad or didn’t actually happen.
It’s a better way to compare countries apples to apples. Two countries with similar economies may have drastic different tax policy.
Measuring it as you suggest is absolutely done and is helpful to research policy inside a country, but between countries, it’d be a poor metric.
Why would domestic wage slave give a fuxk about this lol
Besides being an insult the capacity and curiosity of the working class, your comment is anti-intellectual.
You’re much more diplomatic than myself.
I saw them censor their language and just went “sush, adults are talking”.
Giving regime propaganda as gospel is now "intellectual"
🤡
You clicked into the discussion
And I am trying to get the reason from Orginal commenter
I don't think he is interested in discussion beyond what him restating generic talking point
Ass
c/aneurismposting
Because none of the tax revenue actually goes to paying off debt. There isn’t much left after it gets past all the politicians shoveling it into their own pockets.
Most money goes into owners' pockets, politicians are cheap whores. Pay them 1 million, get back 50m in some welfare
Correct me if I am wrong but isn’t this sort of the deficit.
Revenue-expenditures is deficit in the simplest terms I understand
In the guide below they don’t use gdp for national deficit but every thing I see for fiscal deficit has gdp. So I guess one is measure of nations economy versus the government budget. A nation’s economy it makes since to use gdp because that is all the money moved by productions so to show the economy of a nation’s is able to produce more than it indebts itself is important fiscaldata.treasury.gov/…/national-deficit/
It's not the deficit, no. As you correctly stated, the definition of deficit doesn't involve GDP. You could measure deficit as a proportion of GDP to compare deficits across differently-sized economies, but that'd be a different statistic. For example, imagine:
Australia has: GDP $1,000; government revenue $500; government expediture $600
New Zealand has: GDP $500; government revenue $200; government expediture $300
Both have a deficit of $100 per year. If they have been running the $100 per year deficit for ten years, both have $1000 in debt. For Australia that's a 200% debt -to-revenue ratio, but for NZ it's 500%.
I think it is measured and professionals who work in areas where this was relevant probably track this number among many others. I think the real question you are asking is why it is always framed as a % of GDP in public discussion and news reporting. Some people here point out how % of GDP can be more useful for comparing across countries with vastly different sized economies but I think we all know the real answer has more to do with how people perceive the value differently by using the larger number. Framing government debt as a % of GDP serves the zeitgeist, whatever that is.
The zeitgeist isn’t something that something can be in service to, it is the resulting cultural mood from other things that are being served.
I think you mean it serves the status quo.
Government debt is not like your debt. It’s a monetary control tool more than anything. So the revenue in a lot of ways doesn’t matter, especially for countries with a lot of power in their currency.
https://www.cbo.gov/publication/59946
https://usafacts.org/articles/how-much-revenue-does-the-federal-government-collect/
33T in national debt https://fiscaldata.treasury.gov/americas-finance-guide/national-debt/
1.6/4.5=35% of revenue is spent on debt service and nothing to show for it... no healthcare, no education, no housing, no maternity leave, no child care, no infrastructure...
at what point are people going to start asking questions where the money went?
Tried to answer, but it got very convoluted, here it is anyway as I typed it out…
Because that’s a less useful metric basically, to change their budget a government can:
This means that a budget can swing quite a bit in value quite quickly if needed (or if something goes wrong). This means the % could swing quite widely.
GDP on the other hand is effectively the value of the economy, so moves slower and is a better metric to compare different countries with different economies and tax systems (assuming they tell the truth about their GDP…)
Ultimately, if a government needs more money, most of the time it can get it… But whatever they do will have side effects. But those side effects depend on the size of the economy, the bigger the economy (measured by GDP) the more can be done/taken without causing a large effect.
Both of these fail to highlight countries that already have a high tax load though, so in practice a wide range of metrics will be used.