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Wednesday, November 10, 2010

Thinking Fiscally, On the Right Side of the Brain

Would it surprise anyone to find that draft from the "President's Deficit Commission" does not admit upfront that we have a revenue problem? Nor does it admit anywhere that there is a revenue "alternative solution" to Social Security solvency?

Indeed, there are two major categories, spending cuts/cost containment and, instead of tax hikes, something euphemistically or quixotically or lovingly called "comprehensive tax reform".

Why? Because at least one Party in the nation can't say the words "tax hikes", even despite a long preamble about Patriotic Duty that includes the words "shared sacrifice" and "everything must be on the table".

Consider that part of the proposal is that we move quickly to just three federal tax rates.

Without knowing anything more, doesn't that just sound like re-arranging deck chairs on the Titanic to you, in the context of trying to solve a problem of great magnitude? I mean, if you had to brainstorm ideas to close a fiscal gap or to drop debt-service ratios, would you immediately blurt out, "let's have just three federal tax rates, that will solve the problem!"?