What's another trillion when you are broke anyway?

Quote from: Jeremy Roenick on January 31, 2012, 04:23:19 PM

NC, the damming CBO report recommends no, strike that, predicts that taxes will be going up drastically in the future. It's an inescapable fact that with deficits this high, taxes must go up to slow the pace. unfortunately it will lead to the same problem that Japan suffered through the 90's and still today. The "lost decade" in Japan is growing into the lost two decades. And we began our lost decade in 2008. I wonder just how long ours will last? It's going to be near impossible to lure manufacturing back to North America and be raising corporate as well as personal taxes all at the same time.

Bottom line is that if the Federal Government doesn't learn to live on limits like everyone else during these depressive economic times, raising taxes will NOT be the solution. Only a stop gap before the eventual sovereign debt crash.

If it's an inescapable fact, then why doesn't one party recognize it, and deal with it like an adult? Say, by tying tax increases to actual cuts in spending? Furthermore, if we're worried about the tax incentives for manufacturing, then let's recognize not all taxes are the same. A VAT has no effect on trade, for example. Every proposal I've seen involves reducing corporate rates, and broadening the base. Now we have multi-national big boys paying zero percent effective rates when they offshore, while a domestic manufacturer pays 35%. Let's address THAT. And if really smart people gamble on Wall Street instead of make things, they get rewarded with massive tax subsidies for blood sucking off the rest of the real economy. Let's address THAT.

And I'm not sure of anyone, actually, who says that tax increases are THE solution. Part of the solution, since it's politically impossible to get spending to sixty year lows, but not THE solution. But the right wing pretends that there is only one proposal - tax increases - on the table, but in fact the other, really one difficult, issue is health care costs. If we solve that, we solve our long term deficit problems. I'd welcome a right wing that had actual constructive proposals on that that went beyond "hell NO WE CAN'T!!"

FWIW, the Japan economy isn't easily summarized. They have lost decades for stock prices, but a lot of those years have been OK for the "country." Their peak unemployment rate for the last 20 years was.... 5.5% Now it's 4.5%. It's not a simple thing to compare apples to apples with Japan, but we tend to judge economies based on the fortunes of the plutocrats and that might not be the best standard to judge economic performance.

http://www.tradingeconomics.com/japan/unemployment-rate