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Moms är lösningen på USAs budgetproblem

In the financial turmoil of 2008, bail-outs by the US and other governments were unfortunate, but necessary. However, the subsequent $800bn American stimulus package was largely a waste of money.

President Barack Obama’s administration has consistently overestimated the benefits of stimulus, by using an unrealistically high spending multiplier.

VAT  /moms/ would be a two-edged sword: a highly efficient tax, but politically dangerous.

To paraphrase Larry Summers from long ago, we don’t have VAT in the US because Democrats think it is regressive, and Republicans think it is a money machine.

We will get VAT when Democrats realise it is a money machine, and Republicans realise it is regressive

.Robert Barro



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