[patrickaljord]

Any observers here for the last 60 years have noticed that the more tax revenues we get, the more ambitious we get with out spending and the more debt we create. The day France gets no or too little tax revenue and very bad rating is the day it'll be forced to cut spending. Until then, time has proven that it will never seriously cut spending.

[danmaz74]

Correlation is definitely not causation...

[patrickaljord]

But there is a clear causation here. In order to keep increasing spending forever as they are doing, govs need tax revenue, the more money they are allowed to borrow, the more debt they can create. They couldn't create so much debt if they didn't have tax revenue to justify their ability to repay their debt. Problem is, at some point, if you want to keep on increasing spending and therefor your debt forever, you have to increase taxes forever too and that's what's killing the economy. Not to mention that it doesn't even work http://en.wikipedia.org/wiki/Laffer_curve

[danmaz74]

Come on, no serious economist gives credit to Laffer's curve - until taxation goes over something like 70%. And it's incredibly easy to demystify: Just try to check how many times taxes were increased, and fiscal revenues increased. If we were on the descending slope of that curve, increasing taxes would decrease fiscal revenue.

[patrickaljord]

Check the news, in France we've just reach this point. This year the State is getting a decrease in tax revenue despite a tax increase. Heh, at least they would have accomplished something useful: they proved an old theory right!