In your column today on extending the lower tax rates that now exist on the highest levels of income, you justify your point on two levels:
- The government needs more revenue and the state needs to take as much property as possible from private owners;
- Wealthy people are unlikely to spend every penny of their income immediately, so it is important for the Political Classes to get their hands on those funds, as governments will spend freely in the short run.
- Impose your own tax rates on yourself: If these irresponsible Democrats and Republicans don't jack up the tax rates, i.e. Herbert Hoover in 1932, then raise your own personal rate, taxing yourself at 39.6 percent, and then sending that money to Washington. Your example will inspire others to do the same, I'm sure. If you complain that to do so would require you to hire another accountant, that would be good, since you would be providing a job and we need jobs, you know;
- Spend all of your current income: I'm not privy to what you make, but I suspect that your Princeton salary does not even pay all of your taxes, given that you probably make well over a million dollars a year and maybe more. Now, if you are to be consistent, then you need to spend everything you get when you get it, the sooner the better. Since you are not willing to do the Right Thing and turn your entire income over to the government, the next best thing you can do is to be on a permanent spending spree, with any "savings" falling into the next category;
- Eliminate all of your "investments" except for any portfolio of government bonds: Because governments are up-front spenders, you don't have to worry about where your government bond money is going, for it will be spent quickly (perhaps not quickly enough for True Believing Keynesians, but at least more quickly than private individuals might be spending). Moreover, I would recommend that you eliminate ALL investment in stock, corporate bonds, or anything else that would be deemed "private," since government spending not only is economically superior to private spending, but also morally superior. You can feel good about yourself while still having an "investment" portfolio;
- Don't buy gold, silver, or other commodities: Because of your own personal loathing for gold or any other hedge against inflation (because our immediate "threat" is deflation), you really should not purchase anything that would smack of a "gold standard" or any other representation of money. (This includes any "collectibles" such as gold and silver coins. No cheating, please!) I mean, if you really and truly believe that paper money is morally and economically superior to those "barbarous" relics like gold and silver, then you need to be willing to practice what you are preaching.
Here is your opportunity to help Save The World! Yes, you can set an example for the rest of us to follow. I mean, if you announce this new Paul Krugman Personal Spending Strategy, what is next? Will Bill Gates sell all of his Microsoft stock and buy government bonds and spend the rest? Who knows?
This hardly is a "modest proposal." All I am doing is recommending that you be consistent with what you are writing, and I know that you are anxious to set that personal example so that everyone else in your income category will be shamed for saving, investing, and refusing to spend every penny today.