NO TAX INCREASE CAN SOLVE TOO MUCH SPENDING
Two centuries ago, it was common practice for the doctors to bleed a patient in the belief that it would get rid of the "vapors" that were thought to be causing the illness. As a result, most patients got worse and many died. Much of the world is now suffering from equally incompetent politicos playing economic doctors.
Most of the major democratic countries are headed for a fiscal cliff because they have been increasing government spending at a rate far higher than economic growth for the past several years.
Politicians tend to like bigger government because it gives them more power -- so they have a natural inclination to try to increase taxes rather than cut spending.
As poster children for bad economic policy and for bad tax proposals, I have selected three rich jurisdictions. Despite the vast difference in size of these political entities, the three are exhibiting the same disease -- undisciplined spending. Each of their leaders is prescribing the very same lethal medicine -- tax increases on the most productive and on their capital.


