To: The Citizens of the United States of AmericaFrom: The Bond MarketDate: 2010Re: Urgent Hostage Situation Dear Citizens:By now you may have noticed that you have NO FUTURE. It's gone, missing, vanished. We have seized it -- together with your children's and grandchildren's future. They are being held captive in an undisclosed location. As you read these words, the future is blind-folded, bound and gagged. We have a fully loaded VAT pointed directly at it's head. ...Although your future is unharmed right now, we are prepared to unleash VAT if our fiscal demands -- detailed below -- are not satisfied. Trust us, you do not want to mess with VAT. It is a savage beast, ruthless in its regressivity. Once released, VAT will mercilessly feast upon all the economic activity in your domestic economy. VAT's reach is broad. Not a single person in the country will be left unscathed by it's fury. You might think your current taxes are nasty, but you ain't seen nothing yet. There will be pain.Here's how you can avoid VAT. Now pay attention -- getting your future back unharmed depends on following these instructions precisely. Step One: You will immediately reduce the annual budget deficit to an amount not exceeding 3% of GDP. Step Two: You will reduce the national debt to an amount not exceeding 40% of GDP and keep it there. That's all we ask. Satisfy those two fiscal conditions and you can forestall the onset of VAT. These conditions are non-negotiable. We are in a position to demand them because we are the bond market and we hold all the cards.We have no preference as to how America meets these conditions. You can cut spending, raise income taxes, or undertake some combination of the two. We don't care; just shut up and do it. ...
View the opinion of the VAT BastardSM in its entirety on TAX.com.
The point of this "open letter" is made: Collectively, odds are that we are likely to settle for a lesser standard of living in exchange for the "bennies" that come with public distribution of various entitlements. The cost of continuing to do so will be high. But with the New Deal, the die was cast with the first parachutes divined to help Americans in distress.
Fasten your seat belts and look for inflated prices at retail in the order of 15 to 25 percent. That's what VAT does to consumer purchasing power.