[...] expenditure cascades help explain why the median new house built in the U.S. is now about 50 percent larger than its counterpart from 30 years ago, even though the median real wage has risen little since then.\n Should a recession occur, a temporary cut in consumption taxes would actually provide a much more powerful stimulus than the traditional temporary cut in income taxes. If we take the relevant evidence at face value, there is nothing controversial about the claim that by slowing the rate of growth in spending on positional consumption and cutting back on activities that pollute the planet, we can free up more than enough resources to pay for Obamas ambitious agenda for national renewal. In addition to generating a lot of revenue, they provide powerful incentives for the private sector to undertake much of the required investment for successful transition to sustainable energy sources. [...] as the European experience has shown, people are able to adapt to these taxes in ways that leave their standard of living essentially undiminished.
Post-Consumer Prosperity Robert H Frank The American Prospect; Apr 2009; 20, 3; Docstoc pg. 12 Reproduced with permissi
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