“I don’t buy the Weimar thesis”
A major instigator of WWII and “Weimar” hyperinflation was that Germany owed more than it could sanely repay. We’re setting up for the same situation, with no alternatives.
Consider that near-100% taxation would _still_ require deep (>30%) spending cuts across the board just to stop the hemorrhaging and begin long-term debt elimination, we may be able to tread water for a while but there is no satisfactory exit strategy. Reality is: we can’t raise taxes enough to pay the bills, we can’t cut spending enough to balance the budget without the peasants revolting, and there is no viable combination/compromise of both.
The solution for such a situation, as Weimar found out and we’re about to, is:
1. Hyperinflation: satisfy all commitments in letter (if not spirit) by just printing money. We owe $15T and rising fast, so the only letter-of-law-and-contract solution is to print more currency. The gov’t owes you a dollar? here’s a dollar; it won’t buy a loaf of bread like you expected when we made the contract, it will only buy a slice now, but that’s your loss for agreeing to fiat currency instead of X-backed currency.
2. War: the “have not” creditors and entitlees will revolt for the agreed-on currency being devalued, and the “haves” will resist the confiscation of their wealth. War is the only outcome. Either the government dissolves, leaving creditors & welfare recipients unpaid and anarchy ensues until “might makes right” & “by right of conquest” ensues, or the government entrenches and kills creditors & confiscates existing wealth by force.
Anything wrong with this thesis? I hope so.
Right. But that can be said about more than Germany. Simple analogies are probably a little too much so.
It's probably more often the case than not. Adam Smith wrote this in the 18th century (posted here):
when national debts have once been accumulated to a certain degree, there is scarce, I believe, a single instance of their having been fairly and completely paid... ...the liberation of the public revenue, if it has ever been brought about all, has always been brought about by a bankruptcy; sometimes by an avowed one, but always by a real one, though frequently by a pretended payment.
100% taxation would bring in $0 to the revenue because there would be no legal economic activity taking place at that point