Like many European social democratic countries, the U.S. has gotten into trouble by spending far more than it collects in taxes. Andrew Biggs, Kevin Hassett and Matt Jensen examined studies on how other nations have recovered from their fiscal improvidence. Looking at 21 countries over 37 years, they concluded that effective resolutions are rare (only about 20 percent of cases) and successful attempts to balance budgets rely heavily on spending cuts, whereas failed ones rely on tax increases. What about the "balanced" approach? "On average," the authors noted in the Wall Street Journal, "the typical unsuccessful consolidation consisted of 53% tax increases and 47% spending cuts."
Yes, taxes are going up, but let's remember, as we bow to the inevitable -- that raising taxes on the rich will put only the most trivial dent ($80 billion according to one proposal) in our trillion-dollar annual deficits. This is the great god "fairness" appeased, while the demon debt continues to breathe fire.
The sane policy goals for a nation in the kind of trouble we're in would be economic growth and entitlement reform. The progressive agenda, Richard Epstein writes in "Why Progressive Institutions are Unsustainable" (Encounter Books), supplies a "one-two punch." First, it reduces the private sector by ill-advised regulation. "Second, it imposes extensive and counterproductive programs of redistribution that cannot be supported by a stagnant economy and a shrinking productive wealth base. As that base gets smaller, the demand for a stronger safety net induces yet another round of transfer payments and makes the tax burden heavier and the rate structure more progressive. The new redistributive tax regime in turn exerts greater negative pressures on production levels."
And down we go. The worship of "fairness" is a death cult.