Bravo, ECB

Just a quick congratulations to the ECB (European Central Bank), which apparently has more integrity and is far more honest than the left in the U.S.

Following is an excrept from their latest study, confirming the IMF and Harvard findings, that found that spending restraints is the only sure way of fighting indebtedness while tax increases do not work well at all:

"Our results suggest that the composition of the fiscal adjustment plays an important role in explaining the success of a debt reduction.  The expenditure dummy which reflects the size of the change in the primary expenditure relative to the change in the primary balance has the expected positive sign and is statistically significant.  The results indicate that the discrete change of the expenditure dummy from 0 to 1 increases the probability of a major debt reduction by more than 10 percent.  The revenue dummy, on the other hand, turns out to be statistically insignificant.  Therefore, it seems that expenditure-based consolidations have a higher probability to succeed, while tax increases are less likely to contribute to a large and persistent debt reduction."

The revenue section of the findings is in accordance with long term observations in the U.S. that regardless of tax rates (which were as high as 92% for the top brackets in the 40s and 50s, and as low as 35% recently), federal tax revenues remain constant at around 18% of the GDP. 

Progressive liberals fail to see that entrepreneurs (and people in general) adjust their behavior accordingly when tax rates are pushed up.  This lack of dynamic analysis capability, along with their demented view of social justice and equality, is in large part the reason why progressives are incapable of seeing the folly of their ways and progressivism has never succeeded as a viable system anywhere at any time. 

Even Frederic Bastiat, the great classical liberal theorist, could see the folly of progressive thinking almost two centuries ago when he said: "Government is the great fiction, through which everybody endeavors to live at the expense of everybody else."