Nobel Economist: Not raising taxes on middle class is good politics but bad policy

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After Tim Geithner and Larry Summers opened the door to higher taxes to fight rising deficits and fund health-care reform on Sunday, White House press secretary Robert Gibbs scrambled to clear up the situation on Monday: "I don't think any economist would believe that, in the environment that we're in, that raising taxes on middle-class families would make any sense."

...

Maybe that's good politics, but Nobel Prize-winning economist Joseph Stiglitz says it's bad policy: raising taxes once the recovery is well underway may help solve our long-term problems, he tells Tech Ticker.

"If we get a more balanced view of our balance sheet we’ll realize that if we spend our money well then these great extra expenditures are going to actually make our economy more productive in the future," he says. Spending on technology, education and infrastructure "will generate revenues that will allow us in the future to pay back any borrowing or lower taxes."

Besides, when it comes to health-care reform the Columbia economics professor claims we’re already paying a virtual tax. "Right now we’re often paying for it in hidden charges so it’s like a tax but it’s a hidden tax,” he says in reference to the costs associated with paying for 50 million uninsured Americans.

http://finance.yahoo.com/tech-ticker/artic...t-Stiglitz-Says

[dalegg 143]

After Tim Geithner and Larry Summers opened the door to higher taxes to fight rising deficits and fund health-care reform on Sunday, White House press secretary Robert Gibbs scrambled to clear up the situation on Monday: "I don't think any economist would believe that, in the environment that we're in, that raising taxes on middle-class families would make any sense."

...

Maybe that's good politics, but Nobel Prize-winning economist Joseph Stiglitz says it's bad policy: raising taxes once the recovery is well underway may help solve our long-term problems, he tells Tech Ticker.

"If we get a more balanced view of our balance sheet we’ll realize that if we spend our money well then these great extra expenditures are going to actually make our economy more productive in the future," he says. Spending on technology, education and infrastructure "will generate revenues that will allow us in the future to pay back any borrowing or lower taxes."

Besides, when it comes to health-care reform the Columbia economics professor claims we’re already paying a virtual tax. "Right now we’re often paying for it in hidden charges so it’s like a tax but it’s a hidden tax,” he says in reference to the costs associated with paying for 50 million uninsured Americans.

http://finance.yahoo.com/tech-ticker/artic...t-Stiglitz-Says

It doesn't sound like he's talking about right now at least.