Saturday, March 20, 2010

The Fiscal Sustainability Conundrum... a return to PayGo?

Economic Scene

The Perils of Pay Less, Get More




"In 1900, federal taxes amounted to just 2 percent of gross domestic product. By 2000, the share had risen to 21 percent.


Over the last couple of decades, though, we have repealed Wagner’s Law — or, more to the point, only partly repealed it. Taxes are no longer rising. They fell to 18 percent of G.D.P. in 2008 and, because of the recession, to a 60-year low of 15.1 percent last year.


Yet our desire for government services just keeps growing. We added a prescription drug benefit to Medicare. Farm subsidies are sacrosanct. Social Security is the third rail of politics,"

http://www.nytimes.com/2010/03/17/business/economy/17leonhardt.html?adxnnl=1&ref=economy&adxnnlx=1269111870-fWWg/DxTzmw2BNJ8OhTSvQ

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