Effective Fiscal Communication

As I continue to obsess over the lack of fiscal sanity in Washington, I am convinced that one of our problems is that we really can’t effectively communicate on the subject for two reasons. First, inflation and growth have deprived us of the ability to compare the past to the present. Comparing a million-dollar deficit from 1944 to a million-dollar deficit from 2024 is like comparing apples and oranges. Second, our minds cannot readily grasp excessively large numbers like billion or trillion. Anything amounting to more than 10 million dollars is just “a helluva lot of money.”

To address this problem, I propose a new word — GORMAN. Senator Arthur P. Gorman was an early advocate for a national income tax, and this new word comes from income taxes. The largest number on anyone’s tax return is gross income: total income from all sources without any deductions, adjustments, or credits. Now, imagine the IRS imposed a 1% tax on gross income, again, without any deductions, adjustments, or credits. The amount of money collected is one Gorman.

As the economy grows, the size of a Gorman grows. As inflation rises, the size of a Gorman rises. Therefore, a 1944 government deficit, budget, spending level, or tax burden expressed in 1944 Gormans should be directly comparable to a 2024 government deficit, budget, spending level, or tax burden expressed in 2024 Gormans.

For instance, if you told someone that defense spending in 1944 was blah blah blah millions and now it is blah blah blah billions, that is useless information. But if you told someone that defense spending in 1944 was 6.37 Gorman (6.37G), and it was 3.68G in 2024, you have instantly communicated the concept and size of a peace dividend.

The Gorman expresses national priorities. Today’s NASA budget is many times larger than the 1968 NASA budget. But expressed in Gormans, the 1968 budget was bigger.

The Gorman inherently conveys a sense of what we can afford, or what we are willing to spend. If you tell me our defense budget is 800 billion dollars, I have zero instinctive sense if that is too high or too low. If you tell me it is 3.68G, that seems a little low. Peace through strength for 3.68% of our combined national income seems like a bargain.

If we saw a graph that showed the annual amount of federal spending expressed in Gormans, the rise would not be as steep as the graph in dollars, but I think it would be more alarming. Each rise of 1G in spending means an additional 1% of my income disappears in taxes.

If you tell me we spend over 5G on interest on the national debt and that the national debt itself is now over 150G, my mind is blown. If you tell me the national debt is $37 trillion, that is just a helluva lot of money.

If we graph the size of the national debt through the years in Gormans, all of us would instantly recognize that the word “unprecedented” is appropriate.

The good news is that if we just slow the growth of the annual deficit to a rate lower than economic growth, the annual deficit will shrink in terms of Gormans, even as it increases in terms of dollars.

G-Pub

ps: The Gorman I propose can be calculated to the penny by the IRS. If economists insist that the IRS significantly undercounts the actual total national personal income, I’ll listen to alternatives. I reject GDP or any number designed to measure the size of the economy. People pay for government, not economies.

pps: I do not guarantee the accuracy of any Gorman number mentioned above.