Roger Altman, former deputy secretary of the Treasury in the first Clinton administration, has a piece in the Wall Street Journal today making the case for a Value Added Tax (VAT). There is so much wrong with this article and argument that I am not sure where to start.

First, the author does acknowledge that the deficit is large. Very large. “Larger than anyone expected,” he says, making me wonder what planet he has been on for the last ten months.

He acknowledges the slow recovery and the decrease in revenue, too. He also laments the fact that the deficit will get in the way of the president’s health-care reform plan, which he acknowledges is extremely expansive. That’s why he praises Obama’s PAYGO policy:

This explains why the president is stressing the importance of a deficit-neutral bill. In other words, that any new spending be fully offset by a combination of Medicare and Medicaid cuts and new tax revenues. Key Senate leaders have echoed this requirement. Fully financed legislation probably will emerge after a lengthy struggle.

I am as much in favor of cutting down the deficit as the next deficit hawk, but here fully financed legislation doesn’t mean what it should mean. The spending cuts will be small and the tax increases will be massive.

We all know the recent and bitter history of tax struggles in Washington, let alone Mr. Obama’s pledge to exempt those earning less than $250,000 from higher income taxes. This suggests that, possibly next year, Congress will seriously consider a value-added tax (VAT). A bipartisan deficit reduction commission, structured like the one on Social Security headed by Alan Greenspan in 1982, may be necessary to create sufficient support for a VAT or other new taxes.

This is riducoulous and, once again, it makes me wonder which planet guys like Altman are from. See, the planet I come from is called France. That planet has a VAT (roughly 20 percent on top of everything else). In fact, it was invented by a Frenchman. And it was always a bad idea. It didn’t reduce the deficit and it depressed the economy. More importantly, it just gave more revenue to the government to spend. When will lawmakers in Washington understand that the only way out of this mess is for the government to spend less, not to institute a VAT, which will just give them license for yet more spending?

Read the whole thing here and cry.