Sooner or later the country will have to start discussing how to raise taxes--not by a little, but by a lot. Spending cuts will be needed too, of course, in Medicare, and in Social Security. But these cannot close the long-term fiscal gap by themselves. In this new column for National Journal, I spell out what it is going to take: some combination of a carbon tax, a broadening of the income-tax base, and a VAT. Yes, it's unthinkable. Nonetheless, it's coming.
My new column for the Financial Times also looks at fiscal policy, concentrating on the efficacy of the Recovery Act. It worked, I argue. We would have been much worse off without it. But it would have worked better if, among other things, a credible plan for long-term fiscal consolidation had been included up-front.
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