Keep in mind that for every 1% of GDP of public spending you cut, you're going to cut GDP by a little more than 1% (more like 1.2%), which will then cut the federal revenue by an additional .3% of GDP.
You just cannot cut spendings during a recession unless you want to go straight to disaster. Greece is a great example of that.
> In the US, if you taxed the top 1% at 100% (and it somehow didn't have massive second order effects) you would only generate about $800 billion in tax revenue.
Which also means that by getting back to the post New Deal tax level (~80%) on those people alone, you'd get $640 billion! And I'm not talking about some communist fantasy (like your 100%), I'm talking about Nixon's tax policy!
Having done so in the decade prior to the pandemic would have massively improved things with regard to the current federal debt.
And how about taxing fortune 500 companies to the levels they're supposed to be taxed? That's also hundreds of billions missing every year.
> Regardless of one's feelings on raising taxes, solely raising taxes is simply not enough to get rid of deficit spending.
But that's just factually not true! even with the mere tax experiment I did above (that is, without making Apple pay their taxes) you can bring the US budget close to an equilibrium in the 2000-2020 era, despite the 2008 crisis and its costs!
That's OK if a government runs a budget with a deficit during a crisis (like the pandemic, or financial crisis), it's not OK that the US (and most western governments actually) have been running with a deficit during the 2012-2020 era, because of tax cuts on the wealthiest. That's how we ended up where we are now.
Government deficit are a political choice, since the 80s we've decided to borrow money instead of getting it trough taxes, but the money was there all along.
You just cannot cut spendings during a recession unless you want to go straight to disaster. Greece is a great example of that.
> In the US, if you taxed the top 1% at 100% (and it somehow didn't have massive second order effects) you would only generate about $800 billion in tax revenue.
Which also means that by getting back to the post New Deal tax level (~80%) on those people alone, you'd get $640 billion! And I'm not talking about some communist fantasy (like your 100%), I'm talking about Nixon's tax policy!
Having done so in the decade prior to the pandemic would have massively improved things with regard to the current federal debt.
And how about taxing fortune 500 companies to the levels they're supposed to be taxed? That's also hundreds of billions missing every year.
> Regardless of one's feelings on raising taxes, solely raising taxes is simply not enough to get rid of deficit spending.
But that's just factually not true! even with the mere tax experiment I did above (that is, without making Apple pay their taxes) you can bring the US budget close to an equilibrium in the 2000-2020 era, despite the 2008 crisis and its costs!
That's OK if a government runs a budget with a deficit during a crisis (like the pandemic, or financial crisis), it's not OK that the US (and most western governments actually) have been running with a deficit during the 2012-2020 era, because of tax cuts on the wealthiest. That's how we ended up where we are now.
Government deficit are a political choice, since the 80s we've decided to borrow money instead of getting it trough taxes, but the money was there all along.