Sunday, August 07, 2011

More on solving America's debt crisis

I wrote last week that the U.S. could go a long way toward solving its debt crisis simply by being a bit more like Canada and raising taxes to our level.

"The U.S. collects taxes equal to 24 per cent of its GDP. If the take was increased to 31 per cent - the amount collected in Canada - the current year's deficit would fall from $1.5 trillion to $500 billion....

In fact, if the Americans increased overall tax revenue as a share of GDP to the average for OECD countries - 34.8 per cent - they could have a balanced budget immediately, without cutting anything from spending."

(You can read the post here.)

The New York Times makes the same point in an editorial today.


RossK said...

Thanks Paul.

And thanks for the link to the NYT Editorial which does make the point about how important taxes are to rectifying the situation is.

Interestingly the NYT even tip-toes around the fact that it is the Republicans in Congress who are keeping the tax discussion off the table before circling round to blame Democrats too for not pushing 'entitlement reform' hard enough.

What the NYT does NOT do, however, is something that the folks from Standard and Poor's did do....

Which is to explicitly place the blame for their recent credit downgrade squarely on the shoulders of those same Republicans.


Anonymous said...

Canada is apeing the US and ramping up its war on science to battle the deficit - Ottawa cuts hundreds of jobs from Environment Canada -- -- 935 to 1,211 FTEs will be lost