I could have written this thing, though of course, I did not! I am not as sanguine about the Time when Government stimulus turns negative, especially with the continued existence of bad Paper out there. Consumption is bound to fail after all these households find a Rent situation which they must actually pay for, even if the actual rate of Consumption does not fall. The economy is much more devoted to Consumption employment now than it was in previous Periods; Consumption used to fund Production, presently, it only fuels Retail employment. I must say that I believe in the traditional U which will hold, far more than will a V or any form of ‘reverse square root’. The road back up will be long and slow, and possibly impossible with the banks’ current attitudes towards actual lending at the grass root’s level. There is always the tendency during Planting Season for the green shoots to turn out being Weeds.
I can join forces with John McCain on this one, and think Bruce Bartlett calls the Pot too black while standing in the Soot. The Value-Added Tax has a great number of things wrong with its methodology, pressuring exactly the wrong elements with high taxation, while allowing perennial Tax escape for exactly Those who should be most taxed. Retail outlets under Value-Added taxation remain the tip of the Whip, always facing the worst of the Tax; Consumers, angered by the Pricing of Product, stand totally consistent in their demand for low Profit yields for Retail, thus forcing constraint in the employment-generating sectors. Businesses are left to pursue Production from foreign sources, thereby avoiding the impact of the Value-Added Tax; further reducing domestic levels of employment. We do need a Flat Tax, where Taxpayers are actually shocked by How Much the Government wants!
I disagree with Mark Perry most often because of his sensationalism, but never because of his numbers. Tax preparation is much too costly for Americans to bear, though it does employ a great number of academically-trained personnel. The Tax Codes must be made simpler, and Tax Credits must go the way of the Battleships in the Navy. They are too large, too bulky, and always grant far more license than originally intended with passage. I could even make an Argument for elimination of the Personal Tax Exemption, as it costs about $80 billion in tax revenues going to individuals who should be paying the Tax. Any line of Tax reductions which allow a significant segment of the Taxpaying population to cut their taxation by more than 30% of the nominal rate produces more injury than aid. Taxpayers should never ask What a Tax Cut does for them; but ask Who gets out of paying how much. There should never be any Tax reduction greater in amount than Twice the Amount of taxes paid by the poorest Taxpayer. Open-ended Tax remissions are the greatest bane in our Tax Code, and should be treated like an infectious disease. lgl