US Taxes, Spending and Deficits: Big Consequences for Coral Gables
August 7, 2010 Leave a comment
A recent statement of Simon Johnson clarifies the taxing and spending options of the US now and in years ahead.
Most of the discussion of federal budget issues today is misdirected. The shorter run issues are dominated by the likelihood of another financial crisis – and the implications that would have for the budget deficit – but no “fiscal hawks” even want to acknowledge the issue. It is very hard to take anyone seriously if they refuse to look at these (uncontroversial) numbers. Medium term, we obviously need tax reform. The good news, in a sense, is that the US has an antiquated and inefficient tax system; it would not be hard to improve how this operates, raising revenue and actually reducing distortion. Longer term, Medicare is obviously a tough problem with no easy solutions yet in sight. But the argument “just cut entitlements” cannot be taken seriously. [underlines added]
He raises what are important facts and risks for the US economy, and indeed for the future of the City’s budget, spending, taxes and economy. Coral Gables authorities and leaders should not be too optimistic about the future of the US economy. Stagnation is more likely than a happy growth even for a premier city like Coral Gables.