Under Reaganomics we went to a supply side economy for many things. That type of tax incentive eventually resulted in an "Honest Dollar" and more revenue with an expanded economy. We need Bushonomics and an end to tax on interest income and dividends paid to individuals etc.
It was Greenspan who admitted in 2003 he failed to slow the econmy in 1997 and caused the stock market bubble to Burst. It was Greenspan who failed to cut interest rates when Poppa Bush ran for election and the economy had faltered. It was Greemspan who stated in Jan. that we do not need a tax cut, just as he couldn't spur the economy with any more significant interest cuts. We need a Milton Friedman; we need someone whose ideals aren't politcal disguised as neutral. Greenspan goes for a prostrate operation tomorrow. I wish him well but can't help thinking...one slip and we will have a robust economy. We are just a "hair away".
That point is not addressed to commentary about appropriate levels of taxation and spending but to the pure monetary measuring stick issue--at the moment, governments at every level do not have enough tax revenue to pay existing commitments.
That is the result of the deflationary economic contraction in the general economy.
The country is still generally in denial--"the stock market bottom is in"; "real estate has real value and can't go down"; "recovery in the second half"; denial that the real problem is an imbeded deflation resulting from excess levels of debt.
So my point is, ok, what does it take to make the denial analysis work--what makes the stock market go up; keep the real estate bubble from collapsing; and see a general economic recovery? What would you expect to see if the denial argument was going to be correct?
And one of the things you would see very early is increasing tax revenues at the state, local, and federal income tax levels. Fact we are not seeing those revenues is the most important indicator that those in denial will not be correct.