Nobel Prize-winning cat-stroker Paul Krugman thinks we should tax financial transactions, given that much trading is "dubious at best," and that "there's considerable evidence suggesting too much trading is going on."
I would like to suggest a slight revision to the professor-turned-pundit's grand idea:
Then there’s the idea of taxing financial transactions opinion columns, blogs, and other forms of expressing oneself, which have exploded in recent decades. The economic value of all this trading yammering is dubious at best. In fact, there’s considerable evidence suggesting that too much trading bloviating is going on....
And here’s the thing: Because there are so many transactions blowhards, such a fee could yield several hundred billion dollars in revenue over the next decade....
But wouldn’t such a tax hurt economic growth opinion-making? As I said, the evidence suggests not — if anything, it suggests that to the extent that taxing financial transactions pundits reduces the volume of wheeling and dealing opinions (or anything else with which I disagree) that would be a good thing.
In the same col, Krugman asks, "The long-run budget outlook has darkened, which means that some hard choices must be made. Why should those choices only involve spending cuts?"
Let the record show that neither of the two official long-range budget proposals for fiscal year 2012 (now entering its third month without even the semblance of a budget!) propose cutting spending. Barack Obama's budget envisions spending $3.7 trillion in 2012 and $5.7 trillion in 2021. The Republican alternative, authored by Rep. Paul Ryan (R-Wisc.) and passed by the House, wants to spend $3.6 trillion this year and $4.7 trillion in 2021. As Los Lobos asked so many years ago when we were young and carefree, how will the wolf survive on such meager rations? Especially since spending in the decade of the 2000s only increased by roughly 100 percent in nominal outlays?