Saturday, September 25, 2010

The Shape of Things to Come and Not to Come

4. Taxes won't be raised much (do the Dems seem to have great love for reversing the Bush tax cuts?), spending won't be cut enough (the recent Republican document is extremely weak), and within twenty years we will have a sovereign debt crisis in the United States, as one day a Treasury auction won't go well. I'll predict, but not favor, the emergency passage of a VAT, a' la TARP, which will restore fiscal stability but lower the long-term rate of growth. When that time comes, the VAT will indeed be necessary, though ex ante I would opt for less social protection and a higher rate of economic growth.

That's Tyler Cowen and it's only #4 in a list of twelve. All of them are thought-provoking and worth consideration even on a beautiful Saturday morning.

Predictions about even the medium term are tough, but much of the list seems plausible to me.

Unfortunately, it's doubtful that very few of the 535 members of Congress have thought about these issues in as serious a manner.

Posted via email from rhymeswithclown's posterous

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