Tags: Krugman | Hike | Taxes | US | paul

Krugman: Failure to Hike Taxes Is Ruining US

Friday, 13 Aug 2010 03:23 PM

Economist Paul Krugman says the government's failure to raise taxes is ruining the country, forcing lights to go out, paved roads to be destroyed and teacher layoffs.

“We’re told … that basic government functions — essential services that have been provided for generations — are no longer affordable,” Krugman writes in The New York Times. “And it’s true that state and local governments, hit hard by the recession, are cash-strapped.”

“But they wouldn’t be quite as cash-strapped if their politicians were willing to consider at least some tax increases.”

Krugman says that the federal government, which can sell inflation-protected long-term bonds at an interest rate of only 1.04 percent, isn’t cash-strapped at all, but isn’t offering aid to local governments because Republicans and centrist Democrats are more concerned about government deficits and preserving tax cuts than helping cities and states that overspent their budgets.

“In effect, a large part of our political class is showing its priorities: given the choice between asking the richest 2 percent or so of Americans to go back to paying the tax rates they paid during the Clinton-era boom, or allowing the nation’s foundations to crumble — literally in the case of roads, figuratively in the case of education — they’re choosing the latter,” Krugman says.

Fox News reports that Democratic Senatorial Campaign Committee Chairman Robert Menendez said that Democrats intend to return to Washington in September to craft legislation that extends some of the tax cuts that President George W. Bush instituted in 2001 and 2003, particularly those that they say benefit the middle class, though he acknowledged a compromise may be necessary on extending the top two tax rates to satisfy a handful of members in the caucus.


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Economist Paul Krugman says the government's failure to raise taxes is ruining the country, forcing lights to go out, paved roads to be destroyed and teacher layoffs. We re told … that basic government functions essential services that have been provided for...
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2010-23-13
Friday, 13 Aug 2010 03:23 PM
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