I suspect we’ll start seeing more “concern” over an unsustainable economy as the progressive push begins for a VAT tax. Key to the campaign will be to pretend that the unsustainable tax-and-spend economy just kinda happened — and that a VAT tax, which is the next step toward more complete bureaucratic control of the economy — is just the fix we need to avoid economic disaster.
Will any mention be made of all the new entitlement spending this Administration has burdened us with in the run up to this newest “crisis”? Of course not. At least, not by the mainstream press or Democrats. And sadly, one can see many in the GOP crossing over to support such an abomination as VAT, knowing as they must that it means more revenue for the government, even if in the process it means less revenue for the poor and middle class.
It’s like we’re watching a really bad thriller — the kind where you know the villain after the first two minutes — and yet somebody has bolted the doors to the theater so that we can’t leave. From Politico:
The nation’s fiscal path is “unsustainable,” and the problem “cannot be solved through minor tinkering,” the head of the Congressional Budget Office said Thursday morning.
Doug Elmendorf, best known for arbitrating the costs of various health care proposals, added his voice to a growing chorus of economic experts who predict dire consequences if political leaders don’t scale back spending, increase taxes or both — and soon.
Elmendorf noted a recent CBO report that pegged an increase in the public debt from $7.5 trillion at the end of 2009 to $20.3 trillion at the end of 2020 if President Barack Obama’s fiscal 2011 budget were to be implemented as written. As a percentage of gross domestic product, the debt would rise from 53 percent to 90 percent, CBO forecasted. The last time the percentage was that high was right after World War II.
Elmendorf’s remarks to reporters at a breakfast sponsored by the Christian Science Monitor echo the recent sentiments of a pair of Federal Reserve chiefs — the current head, Ben Bernanke, and former Chairman Paul Volcker.
Volcker said earlier this week that the U.S. should consider adopting a value-added tax, an idea he described as being less toxic than it has been in the past.
“If at the end of the day we need to raise taxes, we should raise taxes,” Volcker said.
On Wednesday, Bernanke said in a speech in Dallas that the government must cut entitlements or raise taxes.
“These choices are difficult, and it always seems easier to put them off — until the day they cannot be put off anymore,” Bernanke said.
Cut entitlements or raise taxes… Hmm. Which way do you think ObamaCo will go, given that choice…?
(h/t Get Liberty)
a VAT is just cap n trade on steroids, and Princess Lindsey bends over frontwards for some cap n trade…
I’m not sure we can count on Team R to stand united against this.
Well, at least we can begin to see a conservative platform coming together…
“If at the end of the day we need to raise taxes, we should raise taxes,” Volcker said.
pragmatism!
I think that rather than working our asses off trying to reform the political parties that have hung us out to dry, or trying to educate our neighbors on what our kids are being consigned to, we should just castigate our fellow countrymen and wallow in despair.
No, it’s C&T’s ugly cousin. They kinda look the same but you can get mugged by either or both of ’em.
When I was in Catholic school the nuns told me I shouldn’t castigate ’cause I would go blind.
With VAT, you can say about the USA…
Vee
Are
Toast
geoffb: that’s gotta go on a protest sign.
Thing about VAT is that stuff has to be produced for it to get taxed, but the taxes will make it harder to produce things.
Econ 101. No wonder congress is oblivious.
It would seem that a VAT fight would be the one thing most likely to serve as a unifying rally point for the TEA partiers.
Are the Obami really that stupid? Or are they looking to ‘give’ the opposition something to chew on while the real action is somewhere else?
Well, me, I’m looking forward to a vibrant black market!
Even Rush was being “Stupak” about this tax yesterday saying that it would be ok as a replacement for the income tax and that it was a sales tax.
It is to a sales tax as the corporate income tax is to an income tax. It is a hidden tax. One which can be raised and the blame for the cost of paying it falls on companies who are the ones collecting it but appear to be simply screwing the consumer with their prices.
Plus every company will have a huge incentive to mount a large lobbyist contingent. Spreading money all around the political commune-ity to curry exemptions which can give them unstoppable advantage over their competitors. A Fascist wet dream tax scheme.
Mr. Squid if one is found castigating and wallowing in a thread entitled provacateurism I think one is very likely engaging in provacateurism.
But that particular provacateurism hits close to home cause of the trueness.
And in the right measure it’s the sort of provacateurism what is a dagger aimed at the heart of the dirty socialist ascendancy.
Americans can handle being losers. So they’re in kind of a pickle these days.
Americans *can’t* handle being losers.
Sorry I am typing too fast I am very late for to go to the place I go during the day.
Raaaaaaacist!
Plus every company will have a huge incentive to mount a large lobbyist contingent.
That’s the reason Congress loves the idea. They get to decide when value has been added, e.g. they may decide that while producing sugar from cut cane, or adding it to ice cream adds little value, mixing the same sugar into a carbonated beverage adds significant value.
Feets, are you in the right thread?
yes Mr. D I was talking to Squid at #4
I am so late I am a bad employee
Ah, thanks for the clue. I was too lazy to check the orange thinger for hidden messages. Now it make sense.
But I’m still waiting for my decoder ring…
I’m wondering if this is going to be sold as a replacement for income tax. If so, you can bet the the IRS won’t be going away; they’ll just transition into their new role as the
KrankenversicherungpolizeiState Health Insurance Police19
Nope, in addition to…
I’m not opposed to the VAT in principle, but I am in practice. There are a lot of revenue raising benefits to the VAT over the income tax.
The main problem is that most of the statists in congress view it as 1) a way to rein in American consumerism (which is just so tacky and bourgeois) 2) a way to regulate corporate actions indirectly, and 3) the perfect way to pluck the goose with the least amount of squawk since the cost of the tax will be hidden from all but the 5% or so of Americans who actually want to see what government is up to. Kinda like FICA’s big ugly older brother… the one with mob connections and a chain in the backseat of his car that you don’t want to know about, really. Really, you don’t.
So what we’ll get is the current income tax, a steadily rising VAT eating up productivity behind the scenes, and Obama continuing to claim that he fulfilled his campaign promise of not raising taxes. Meanwhile the country continues to slide down the wrong side of the Laffer curve and the cost of goods relative to income increases.
Cut entitlements or raise taxes… Hmm. Which way do you think ObamaCo will go, given that choice…?
Both. Of course, your current take home pay is just an entitlement, dontchaknow?
We are well and truly fucked.
That is all…
Dibs on all your stuff!!
The only place this in which confiscatory tax rates has worked well is in monolithic cultures in small European countries, and even then people eventually stopped working. Why would anyone toil in an environment that takes away most of the fruits of your labor?
It’s always hard to “tinker” with something after you’ve been busy smashing it to pieces with a hammer.
Tl;DR: Democrats: “Americans are to stupid to remember that we broke the system and that we’re gonna break is some more “pretending” to fix it. Suck it, godbothering clingers.”
Hope! Change! Confiskatory Tax Policies!
The secproggs should start paying this voluntarily, as Biden has told us it is our patriotic duty, and they don’t want to be chickentaxpayers.
This next link is for ‘feets. The only option to the growing financial crisis soon to be perceived by the sheep as acceptable will be that option that finally globalizes and imprisons us. This is how it ends. Welcome to machine.
for the greater glory of lord baracky
Australia and Canada, they don’t have graphs.
From the conclusion of the study referred to in JHo’s link:
Translation: start making babies or start importing them. Many countries are practically giving young people away. We might want to look into that.
Link. (It’s a short exec summary type deal, only 26 pages.)
If I could get people to agree with me on one thing on these topics it would be: the future is a choice.
If you fuck bodypillows and robots while not allowing immigration you become Japan.
It’s a choice.
Those charts are projections, that’s all they are. They’re based on our giving lots of benefits to old people while they age without creating replacement workers. If we shrink the benefits, started making babies and/or started importing them, and adopted pro growth policies, history will keep on chugging right along.
To quote the noted intellectual Sarah Connor: no fate but what we make.
our best hope I think is China grows so big the treasuries they hold become trivial to them
either that or magical budget fairies
No. Not at all. Totally wrong.
Our best hope is that we reduce our entitlement spending, import or make lots of new workers and adopt pro growth policies.
I know you were kinda joking.
I’m just anti-defeatist and on a tear at the moment.
it’s just that on top of all of this structural stuff, bad things are going to happen… things what our little president man calls “opportunities”
God help us
HizHIGHNEzSBarroomy wants to build new highspeed rail. China has a surplus of young males. 2 + 2 = neo-Cooliefest. West-East and East-West with joining ceremony in Denver 2014? Goldstein snaps Pulitzer winning photo of the Golden Spoik driven into the cranium of America by HizHIGHlyHoliNEzs. Crowd disassembles. Returns to drudgery.
While a neo-Cooliefest might be my one chance to own an opium den, Chinese males might have a hard time making babies with one another.
HIzHIghHOliNezs don’t know nothin’ ’bout making babies.
I think we need a VAT.
I shorted the dollar and need to make a huge profit. Besides I own property overseas so I can laugh at all the peons in the USA if VAT is passed.
Those charts are projections, that’s all they are.
Those charts are extrapolations and they’re precisely what this globalized money mess all but guarantees. We’re well on our way – consider the Obarkycrats adding 50% to the national debt in 18 months or less and constantly threatening to do it again. Our money is utterly jacked and it plays into the left’s hands. The money system is the finest Cloward-Piven imaginable.
If I could get people to agree with me it would be that the monetary past is not a choice and that it’s written our future. The nature of the reserve note economy is that it is ruinous. Coupled with Obarkycrat hyper-Keynesianism it transfers wealth from producer to fucking federal manager.
The right’s single greatest failing is not realizing and acting on that. It’s not really the right then, is it?
So, it doesn’t make a difference that we have huge entitlements, too few replacement workers, and anti-growth policies?
I guess this baby boomer demo issue that we’ve all been writing and reading about for 20 years, that’s been playing out exactly how everyone knew it would, it’s not the prime mover.
Look. I could grant you every monetary issue under the sun and this issue is still what those charts are showing. Too many benefits for retirees, not enough workers.
The very study ZH linked says so explicitly.
Let me put this another way. I do grant you some monetary issues. But, let’s pretend I granted you them all, you and I went into a time machine, fixed the problem and we now had a sound currency and no central banks anywhere.
In ten years, we would still have 1/3 of the population no longer producing, drawing SS and hitting their peak years for health care costs. Those charts would look better, but they’d still show unsustainable debt to output ratios. There is no way around this.
bh, a sound currency’s books may be balanced…or it may indeed be bankrupt by fiscal foolishness, which goes to the piece I linked about fiscal unsustainability..
An unsound currency will always fail and thereby becomes a handy tool for failure. It cannot be balanced. Ever. When every unit of currency is a unit of interest-bearing/creating debt, the gig is rigged.
We will never, ever balance this mess. The endgame is to globally collectivize the whole shebang, which has been the progg dream for decades. By its very operation, the Great Note economy must be a declared economy, just like the instruments of that economy, whether they be meat of paper.
Tell me today’s Obarkycrats don’t want to declare reality.
^ meat or paper…
Anton Chigurh declared reality by punching holes in foreheads. There’s some other kind?
Heh, no, I wouldn’t be so foolish.
Perhaps we should end on that note of agreement.
I look at Europe and the UK, where VATs are common, and I see a bunch of countries that are in just as much financial trouble as ourselves. Worse actually, since their birth rates are lower but their entitlements higher. I see a lot of aspects of their lives are poorer because everything not exempted from the VAT is significantly more costly than it is to people in America. While this may seem like a benefit to anti-materialists, I’m not a big fan of enforcing philosophy at gunpoint.
If there aren’t serious legal strictures placed on future spending by the government, the VAT will fix nothing except giving the bureaucrats more power over us. It will never go away. The crisis will just become the new normal.