There Aren't Enough Rich People To Tax
The colossal size (and growth) of the US government's budget deficit is a problem that seems to remain on the sidelines all the time the Fed is buying and maintaining interest rates at an acceptable level. As we noted last night, nothing points to investor concern (yet) aside from an increasing diversification from the USD as a trade currency. Many have suggested raising taxes on the rich to cover the difference between what the government collected in revenue and what it spent. Professor Antony Davies takes on this thorny issue and demonstrates that taxing-the-rich will not be sufficient tyo make the budget deficit disappear as he notes: "the budget deficit is so large that there simply aren't enough rich people to tax to raise enough to balance the budget"; instead we should work on legitimate solutions like cutting spending.
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