There’s a brewing debate among conservatives over whether they should favor some tax increases to close the budget deficit. Some Republicans on Obama’s deficit panel are talking about cutting various tax breaks for individuals. Possible presidential candidate Governor Mitch Daniels of Indiana recently spoke favorably about a value-added tax and an energy tax. And here is Kevin Williamson of the National Review Online’s Exchequer blog:
Here’s the problem with President Barack Obama’s deficit reduction commission: Exploding debt caused by out-of-control healthcare spending is an Extinction Level Event for the U.S economy. By 2050, according to the Congressional Budget Office, the national debt will likely be three times as big as the overall economy with Medicare and Medicaid gobbling up half the budget.
A fantastic Reason article looks at how Canada and New Zealand cut government spending. Since GOPers often cite NZ’s experience, I found that portion of the piece particularly interesting. Over the span of a decade from the mid 1980s on, the government’s share of GDP fell to 27 percent from 45 percent. Here is a bit on how they did it, according to former government official Maurice McTigue (but please read the whole thing):
An NY Times op-ed by just-departed WH budget chief Peter Orszag is getting lots of play because he advocates temporarily extending all the Bush tax cuts. After that, though, he wants all of them to expire. This is the part that really got my attention: