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Beware the "Grand Bargain"

Ned6 Wrote: Oct 27, 2012 10:24 AM
Government spending has gone from under 20% of GDP to around 25% of GDP. No "Grand Bargain" should be considered, until spending is first returned below 20%. After that hurdle is met, any Grand Bargain on the tax side should overweight reduction of deductions relative to reduction of marginal tax rates. The intent would be to increase tax revenues while reducing marginal rates and simplifying the tax code.

Barack Obama really does have a plan for the next four years. When he thought he was speaking off the record to the Des Moines Register the other day, he said he wanted to negotiate a "grand bargain" with the congressional Republicans. It would include spending reductions and tax increases to reduce forecasted federal deficits.

About the same time that the president was giving his interview, more than 80 CEOs of some of the nation’s largest companies were making a similar announcement. To get the country’s fiscal house in order, they said, we need both spending reductions and...