A must see movie is coming out this weekend: I.O.U.S.A
From the press release
Throughout history, the American government has found it nearly impossible to spend only what has been raised through taxes. Wielding candid interviews with both average American taxpayers and government officials, Sundance veteran Patrick Creadon (Wordplay) helps demystify the nation’s financial practices and policies. The film follows former U.S. Comptroller General David Walker as he crisscrosses the country explaining America’s unsustainable fiscal policies to its citizens.
As we slog through the current credit condition, its really an opportunity to reconsider the over reliance of debt as a way for government (and ourselves) to avoid making hard choices.
In fact, there is very little wiggle room with efforts for debt reduction on a federal level largely because of entitlements. Add to that a GSE bailout that may well exceed $100M and counting.
One for two
The Congressional Budget Office found that “typical estimates of the economic [deadweight] cost of a dollar of tax revenue range from 20 cents to 60 cents over and above the revenue raised.”3 Studies by Harvard’s Martin Feldstein have found that deadweight losses are even larger. He noted that “the deadweight burden caused by incremental taxation … may exceed one dollar per dollar of revenue raised, making the cost of incremental governmental spending more than two dollars for each dollar of government spending.”