In one of the most unintentionally funny piece I have read in a long time, supposed economist Paul Krugman comes out in favor of solving the current budget crisis by raising taxes on everyone while maintaining all domestic and entitlement spending at current levels. Let's be clear what this means. Taxes on the middle class and the wealthy would rise. Over the next ten years, the additional tax revenues are projected to be about 6 billion dollars just from the changes to the income tax and the social security contributions. On top of this, there would be a surtax on the wealthiest Americans that would bring in a bit more and raise the top rate on income well above 50%. There would also be the abolition of many of the current tax deductions. Business taxes would also rise. Spending cuts would be focused principally on defense. Just imagine this. Krugman wants to take about 5% of GDP out of the hands of the people and give it to the government so that all those federal programs could continue an as before. Krugman understands that pulling 5% out of GDP in additional taxes will reduce consumer demand in a drastic manner. Right now, government already takes over 25% of GDP, so an increase of another 5% will take that number over 30% of GDP. A big chunk of the funds kept by the people go for major items like housing, medical care and food. That means that the tax increases Krugman advocates will reduce discretionery spending by consumers by something like 12-15%. In other words, if the taxes are increased to that extent, we may soon see a depression rather than just a recession. More folks will lose their jobs. More people will depend on governement handouts. Less revenue will be collected by the government than Krugman expects. And then, Krugman can advocate for raising taxes still further.
Simply put, Krugman is a fool. His call for tax increases is a call for the destruction of the US economy.
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