Nice analysis. I am in agreement on excessive spending, but I’m not sure why we’d raise the debt limit as a solution.
I think it would be better to limit spending and/or produce additional streams of revenue for the government other than direct taxes (except maybe estate tax). For instance, the government is still owed compensation for its support of Ukraine and helping to bring Iranian nuclear enrichment facilities and funding of terrorism into compliance with international law. If the peace negotiations were to include US ownership of Zaporizhzhia Nuclear Power Plant or the Straight of Hormuz, for instance, then the programs could be funded by international deal making rather than debt or taxes.
"since higher and higher tax rates will slow economic growth."
No, given the expenditure, higher taxes, especially if they are taxes on consumption, speed up growth compared to deficit financing. Of course lower expenditures on non-investment that lower borrowing also speeds up economic growth.
"under current policies, the federal government cannot plausibly pay for the projected path of future expenditure."
"Under current policies" (he refuses to get a job) your worthless brother in law "cannot plausibly pay for the projected path of future expenditure." :)
A consumption VAT (not a "current policy") could zero out the Social Security, Medicare Medicaid, ACA, and unemployment insurance deficit with a fillip of economic growth. Greater immigration, freer trade and regulatory reform would mean a higher VAT base and lower rate.
Nice analysis. I am in agreement on excessive spending, but I’m not sure why we’d raise the debt limit as a solution.
I think it would be better to limit spending and/or produce additional streams of revenue for the government other than direct taxes (except maybe estate tax). For instance, the government is still owed compensation for its support of Ukraine and helping to bring Iranian nuclear enrichment facilities and funding of terrorism into compliance with international law. If the peace negotiations were to include US ownership of Zaporizhzhia Nuclear Power Plant or the Straight of Hormuz, for instance, then the programs could be funded by international deal making rather than debt or taxes.
"these also pretend that rules can promote fiscal balance, while avoiding explicit discussion of expenditure"
And revenue. :)
"since higher and higher tax rates will slow economic growth."
No, given the expenditure, higher taxes, especially if they are taxes on consumption, speed up growth compared to deficit financing. Of course lower expenditures on non-investment that lower borrowing also speeds up economic growth.
"under current policies, the federal government cannot plausibly pay for the projected path of future expenditure."
"Under current policies" (he refuses to get a job) your worthless brother in law "cannot plausibly pay for the projected path of future expenditure." :)
A consumption VAT (not a "current policy") could zero out the Social Security, Medicare Medicaid, ACA, and unemployment insurance deficit with a fillip of economic growth. Greater immigration, freer trade and regulatory reform would mean a higher VAT base and lower rate.