It’s no secret that Congress is spending money we don’t have like a drunken sailor on shore leave. In just two years, our current slate of politicians in Washington have run up over $3,000,000,000,000 in debt. Never mind that we didn’t want any of the things they spent our grandkids’ money on in the first place… they’ll figure out how to pay for it later. Or maybe they already knew how they were going to pay for their binge-spending. For instance, White House adviser Paul Volcker said that the US should have a European-style value-added tax (VAT), and Obama has said that a VAT is “still on the table“. A VAT would be like a national sales tax on everything you buy, to the tune of about an additional 5%, though likely growing to 15-20% within 20 years, if anything is to be learned of Europe’s history with VATs.

There are two huge problems with VATs, aside from the fact that they are economy killers.

First, they cater to special-interest groups because politicians can write loopholes for their favorite campaign contributors, and then slam supporters of political opponents with higher VAT rates.

Second, they are the total opposite of transparency. Why? Because right now, when you look at a receipt, you see how much you paid in sales tax. VATs, on the other hand, are charged at every step of the manufacturing process. These taxes are just passed along to the next person in the line of production, so the consumer just sees higher prices and we never get to see how much money the government is siphoning off our hard-earned dollars.

VATs have historically been used in other countries as a general “slush fund” for politicians to tap into whenever a special interest needs repaid for their votes, or to make solvent a government program or pet project that is bleeding money due to mismanagement, fraud, or plain old “this program was a bad idea from the get-go”.

Someone should ask the Germans and French and Brits how that’s working out for them, because the answer would be “no so well.” The result of the economy-crushing VAT in these countries has led to persistent double-digit unemployment, and gradual increases in the VAT over the years to pay for the increasing socialist programs these countries have instituted.

The solution to the debt we are hemorrhaging as a nation is for the federal government to stop spending money, not raise taxes.