A consumption tax is fine AS LONG AS THERE IS NO INCOME TAX. An income tax is fine AS LONG AS THERE IS NO CONSUMPTION TAX.
For every dollar of increased tax revenue, 3 more dollars are spent. For every dollar of decreased tax revenue, 5 more dollars are spent. It surely makes sense as the same politicians or their clones are reelected every time.
Now that's not completely fair. Frequently a new politician comes along and promises <del>Hope N Change</del> even more freebies than the previous guy and wins. So he's not really a clone as much as he is an "improvement". Every time the government drops another trillion dollars into the toilet, just think to yourself "Grab those ankles once again future generations, we're taking you from behind and it's gonna hurt!" #@^* `em good, I say. Trends show that voters are becoming more enamored with big government with every generation. You know full well that if they were in our shoes they'd be doing it harder. So let's nail them while we can, `cuz it's sure gonna suck when the music stops. The feds should borrow 10 trillion to buy new entertainment systems for everybody. And another 10 trillion to buy movies for us all.
for sure, the economy is struggling right now because of the bailouts... the pols will tell us it is recovering because of the bailouts...
US has to move to export-led and saving-based economy. If Chinese raise their currency, they will import more and change the dynamic. But they also needs, better social safety nets to make sure people don't stick to their jobs, because its their only way to keep their health insurance, pensions benefits, etc. When people stick to their jobs, despite not liking them..it becomes unproductive and feed policies to subsidize jobs directly or indirectly. If chinese consume more, India takes more manufacturing jobs and other growing nations consume more, will there be sufficient jobs for Americans? The best is the enemy of the good, i think VAT would fit that context and worthy.
I understand that the last few years the US savings rate has zoomed up somewhat dramatically. It was actually negative and swung over deeply positive, on par with some European countries. The problem with savings is that your government can suddenly do something stupid and devalue it.