Posted by: The moderator | October 20, 2009

Spend Our Way Out

Bruce Bartlett has an interesting take on how to get ourselves out of the recession: increase less-obvious taxes that won’t get as much public outcry and have the government spend more. That’s odd coming from a Republican, although it makes a certain amount of sense. He argues that tax cuts were the right thing to do back when he was working for Ronald Reagan, but that Republicans have abused that tool since Reagan left office, mostly by assuming that it is a cure-all for everything that ails the country. We’ve been operating without bringing in enough revenue but we don’t want to decrease services, especially as the baby boomers get older. Rather than letting the national debt continue to spiral out of control, he argues we raise more money from value added taxes and then stimulate the economy through direct spending.

The disadvantages to his plan are twofold: it will exacerbate inflation and the value added taxes are seen as regressive, meaning that poorer Americans will be more noticeably affected than the wealthy. Luckily, he’s aware of these problems and not afraid of us knowing about them. It’s a nice break from our typically nasty, ideologically-inflexible budget debates.

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