Jay,

No amount of taxation can satisfy the demands of unlimited spending.

Cowen's plan is just another failed exercise since he begins with the thesis that spending will not be cut.

Perhaps economists like Cowen should examine the life story of lottery winners and contemplate how it is so many instant millionaires end up in the grips of poverty. The lesson appears to be that provident living results from constraints on spending and not excesses in income.

" I would prefer spending cuts, but voters seem too irrational to be willing to cut spending."

Not a single politician in congress cares in the slightest bit what the voters truly want. They just hope if they forget about the deficit and bring money to their districts with pork projects they will get re-elected. How about we place the blame where it is due, back on the politicians. Stop trying to secure funds for BS projects and maybe, just maybe we can cut spending!

Setting aside the discussion about need for increased tax revenues and focusing only on the VAT aspect of this:

The absolutely last thing we need is yet another and entirely new tax structure mechanism and bureaucracy added on top of what already exists.

No, that is just the wrong way to go unless we are going to substitute a VAT system in place of the entirety of income taxes... er, no that won't quite help much either, will it?

Oh well guys, I guess we're back to plain old limiting of deductions to gross income and (my personal favorite) actually including the value of all the perq's and bennies as though they were the direct cash wages they are designed to avoid being seen as.

Yeah, I think we have a winner now.

I think we are at the point where we cant cut spending enough to reduce the deficit. I would be for a VAT accompanied by spending cuts.

Choosing one or the other will not have any effect on our national debt. As the author stated, we can act now on our on accord or wait for another crisis when it may be too late. Congress needs to grow a pair and do what may be unpopular (VAT and spending cuts) or we'll have another crisis in a few years.

As long as government spending grows faster than the overall economy then no amount of tax increases will fill the hole. Reason being that it is impossible for tax revenues to grow larger than the economy.

Government spending is financed by debt but tax revenues must be paid in cash in the year that they are due

The biggest injustice of sales tax is that it is a regressive tax, that is it taxes lower incomes a higher percentage than upper incomes. Yes the actual tax rate is constant, but as a percentage of income it is greater on those who earn less because the less you earn, the greater a percentage of your income is used for consumption.

Fairness, and justice would be much better served by doing away with the parts of our tax code that are already regressive instead of introducing new regressive taxes. Specifically, end the 106k income cap on Social Security taxes. As it is now you pay 12.4% SS tax on your first 106k of income and 0% SS tax on every dollar over 106k. Ending this would raise an additional $300+ billion/year.

As for spending cuts that should be able to receive broad based support, end programs that "reverse Robin Hood" or redistribute income from the bottom up. Specifically, end lavish public pensions which when combined with SS benefits often exceed the US median full time worker income of 45k/year and bank bailouts whose injustice is without precedent short of pre-revolutionary France. The federal government does a good job of not lumping total pension expenses into a transparent lump sum, but estimates are they exceed $200 billion/year.

You could save half a trillion dollars a year, enough to close the pre-bailout era deficits simply by ending regressive practices that distribute income from the bottom up.