An excellent column today by Robert Shiller (of Shiller-Case index fame) on how raising taxes and expenditures at the same time can help the economy grow in times like these: How National Belt-Tightening Goes Awry
This is exactly what I have proposed: increase tax rates and progressivity so we are paying our bills, maintaining social programs that benefit those who cannot take care of themselves, and reducing inequality, and, at the same time, investing in our future through education, research, and infrastructure investment--all expenditures that will boost the economy will improving the future.
We need not believe those who preach that we cannot afford a prosperous future that leaves most folks much worse off. It is simply not true, and is the result of a hidden agenda to minimize what we do together for the benefit of the few.