Taxes, Spending, and the U.S. Government's March towards Bankruptcy

Description

The United States is moving toward a possible catastrophic fiscal collapse. The country may not get there, but the risk is unmistakable and growing. The 'fiscal language' of taxes, spending, and deficits has played a huge and under appreciated role in the decisions that have pushed the nation in this dangerous direction. Part of the problem is that by focusing only on the current year, deficits permit politicians to ignore what is looming down the road. The bigger problem lies in the belief, shared by people on the left and the right alike, that 'tax cuts' and 'spending cuts' lead to smaller government, when in fact the characterization of any new policy as a change in 'taxes' or in 'spending' is purely a matter of labeling. This book proposes a better fiscal language for US budgetary policy, rooted in economic fundamentals such as wealth distribution and resource allocation in lieu of 'taxes' and 'spending'.

Daniel N. Shaviro is Wayne Perry Professor of Taxation at New York University Law School, where he has taught since 1995. He previously served on the faculty of the University of Chicago Law School from 1987 to 1996. Professor Shaviro was a Legislation Attorney for the US Congress's Joint Committee on Taxation from 1984 to 1987, and worked on the landmark Tax Reform Act of 1986. His previous books include Who Should Pay for Medicare? (2004), Making Sense of Social Security Reform (2000), When Rules Change: An Economic and Political Look at Transition Relief and Retroactivity (2000), and Do Deficits Matter? (1997). Professor Shaviro has served as a Visiting Scholar at the American Enterprise Institute and chaired the Tax Sections of the American Association of Law Schools and the American Law and Economics Association. He has published articles in the Harvard Law Review, University of Chicago Law Review, Michigan Law Review, University of Pennsylvania Law Review, and Tax Law Review. His blog Start Making Sense may be found at http://danshaviro.blogspot.com/.

The words fiscal policy normally provoke only yawns from educated readers. But any indifference to the ticking time bombs that threaten the financial soundness of the modern social welfare state should be rudely interrupted by Daniel Shaviro's lucid and disturbing account of our long-term problem. With devastating accuracy he exposes the financial timidity and accounting double-talk that infects members of both political parties and makes a reasoned plea for corrective action - before it is too late. -- Richard Epstein, University of Chicago Daniel Shaviro has performed an important public service by showing how our thinking about the federal budget has not kept pace with advances in economic analysis. Although we are now in the age of the Internet, we are still using horse-and-buggy budgetary terms and presentations. The result is that both policymakers and the public are misinformed and ill-informed about the looming fiscal crisis when the baby boomers retire. When that day comes, it is essential that everyone has a better understanding of the nature of the budgetary problem and options for dealing with it. "Taxes, Spending, and the U.S. Government's March Toward Bankruptcy" is a big step in providing that understanding. --Bruce Bartlett, Nationally syndicated columnist