Taxes And "Shared Sacrifice"
Since the economic reality that now is not the time to be dealing with deficits is ignored by every Very Serious Person, from President Obama on down, the next question is how to address the deficit.
Economic reality tells us that it is not the time to reduce government spending as the nation continues to suffer from insufficient aggregate demand, slack that the private sector is simply not capable of picking up at this time. So, if we must address the deficit now, the most efficient (not to mention fair and decent) policy choice is to raise taxes on the rich. President Obama blew this issue when he did The Deal. A terrible mistake. At the federal level, the discussion is about how much the poor and the middle class must "sacrifice," the rich must never do so. And that cake is baked. At the state level, the electorate voted in zanies as governors in many states (Florida, Wisconsin, Ohio, Pennsylvania . . . New York?) who seem determined to destroy the economies of their states (and to contribute to the destruction of the national economy.) They will likely get their way. In a sense, this will be an additional experiment regarding the basic tenet of Republican governance. But does it matter how it turns out? More . . .
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