"The notion that lower taxes are the solution to all problems infuriates me."

My favorite question to ask experts is this: "What are people getting wrong right now?"

In a place like the Aspen Ideas Festival, these experts have to not only sell their ideas, but defend them. And they come up against other ideas - backed by equally strong personalities - and friction is inevitable. With friction, comes emotion - and there we get to some ideas that people are not just defending in a cerebral, distant and intellectual way, but that they actually have taken a stake in.

I asked this question of Liaqat Ahamed, a former World Bank official and author of the Pulitzer-Prize winning book, The Lords of Finance. Ahamed is a scholar on economic history, so he's the man to ask about context -- although you can also try to get Depression scholar Ben Bernanke on the record about it.

One of Ahamed's observations was that the Great Depression was not one crisis, but a series of crises - and so is our current problem. The U.S. problem became the Europe problem, and if you throw in Asia and other emerging markets, our entire financial markets are interconnected. It's foolish to believe the U.S. would ever be protected if China or Europe crashed.

Anyone reading the news knows the obsession of the United States Congress right now: taxes. Taxes - and their effect on the national budget - are the fulcrum of the debate over whether the U.S. should raise the debt ceiling. And the debt ceiling, in turn, plays into the whole mess we're afraid to address: growing U.S. indebtedness, the creditworthiness of the country, our ability to compete.

So I asked Ahamed: What are people getting wrong? I'm quoting it as food for thought and debate. Here is what Ahamed said:

"The central one is this misconception about taxes. We are a relatively lightly taxed country. And the notion that relatively lightly taxed countries are more stronger is completely misconceived. here's nothing more damaging than having inadequate taxes for your responsibilities .Government has lots of things it should do, and lots of things it should continue to do. Paying for those requires higher taxes. The notion that lower taxes are the solution to all problems infuriates me.

The idea that we're overtaxed is just completely....at the present moment, federal taxes are at 15% of GDP - that's at a 30-year low.

So that is crazy. It's crazy to think that's where we should be. Both historically compared to where we've been and compared to other countries, we're undertaxed."

About the author

Heidi N. Moore is The Guardian's U.S. finance and economics editor. She was formerly the New York bureau chief and Wall Street correspondent for Marketplace.

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