When you or I run into cash flow problems, what do we do? We’re forced to cut spending, of course. It’s not as if we have a choice: We can’t print money, and robbing banks is usually not a good idea.
Congress, though, can spend money even if they don’t have any: It’s called deficit spending. But when the voting public starts complaining even Congress knows they have to do something. Of course, we we have Democrats in control of Congress so the idea of cutting programs is anathema to them.
The New York Times brings up the idea of the Value Added Tax (VAT). The VAT, popular in Europe, taxes at every step of the distribution process. The government doesn’t collect once; rather it gets to collect each time a product changes hands.
President Obama promised not to raise taxes on 95% of Americans. Of course, most of his proposals, including the health care plans being debated in Congress, will either directly or indirectly increase taxes. What Congress should do is cut programs, cut regulations, and cut the bureaucracy. Instead, expect the VAT to be championed by the Democrats in Congress.
Hat Tip: Hot Air