The Myth of the Sustainable Public Budget

by Wendell Cox 11/16/2010
Nobel Laureate economist Paul Krugman caused a stir on ABC’s This Week, expressing the following view to Christina Amanpour on the recommendations by the leadership of the US Debt Reduction Commission:

“Some years down the pike, we’re going to get the real solution, which is going to be a combination of death panels and sales taxes. It’s going to be that we’re actually going to take Medicare under control, and we’re going to have to get some additional revenue, probably from a VAT.”

He later clarified his statement to be less provocative, noting that health care costs had to be better controlled and that there is a need for “several percent” more revenue, which might “most plausibly” come from a value added tax.

He went on to say that “And if we do those two things, we’re most of the way toward a sustainable budget.” That is a very tall order. Any serious examination of government costs makes it clear that there is no such thing as a sustainable budget. Click here to read more of wendell Cox’s superb writing.

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