Quote:
Originally Posted by golfing eagles
Are they???
We didn't raise taxes on a 25 trillion dollar national debt, so why is it "inevitable" that they are raised on a 29 trillion debt?
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Lots of moving parts in today's market that weren't so prominent 4+ months ago. Interest rates are more likely to rise, inflation is more likely to occur, loss of revenue is happening (from lost jobs), etc. These all contribute to a much different dynamic. The Fed has tried to respond but they don't have many tools left to deploy at this point. I hope interest rates do not go up, that there is no inflation and that jobs are recovered as quickly as they were lost.
While I "hope" that is true, the more likely scenario is not as optimistic. The issue is what level of federal debt is "appropriate" and more importantly, at what point does that level become unsustainable. That is when revenues have to increase or spending has to decrease. Unless there are other levers to pull (such as cutting spending or raising revenue in other ways), taxes become the one certain tool. Another point, the federal government has mechanisms available to it that states do not have. States do not have the ability to print money so their options for dealing with a revenue shortfall are much more limited.