Paul Volcker: Carbon Tax, VAT Should Be On The Table... what?

By WSJ Staff -- Henry J. Pulizzihttp://blogs.wsj.com/economics/2009/09/29/volcker-carbon-tax-vat-should-be-on-the-table/tab/article/.

[ This is unbelievable, they want to HELP line my pockets mwuah hah hah - Al Gore]

The U.S. should consider a tax on carbon or a value-added tax if it can't tackle the deficit by cutting government spending, former Federal Reserve Chairman Paul Volcker said in an interview to be aired Tuesday and Wednesday on PBS.
"I think if we can't do it on the cost side, we've got to go on the revenue side and it's too early to do it, but it's not too early to begin wondering," Volcker said in an interview on Charlie Rose. "One possible approach, as people have talked about is a tax on carbon, tax on energy, that's a big revenue producer if you're willing to do it. Not very popular to say the least."
Volcker is a chair of the President's Economic Recovery Advisory Board, or PERAB. An offshoot of that group is due to present President Barack Obama a set of options on potential changes to the tax code by Dec. 4.
Volcker suggested a tax on consumption should be among the changes under consideration if expenditures aren't brought under control. He said "there are many choices" beyond a value-added tax or an energy tax.

"Those are two big ones. It doesn't have to be one of those two," Volcker said, adding that "I'd love to see the expenditures held in check so we don't have to do that."
"My tax philosophy would be if we can't deal with our expenditure loan with the present tax system, we've got to think about changing the tax system," Volcker said. "When you think about changing the tax system, given the problem that we started out talking about, you've got to talk about some tax that hits consumption."
PBS released a transcript of Volcker's interview on Charlie Rose. The interview also will be aired by Bloomberg TV.
Volcker, 82, also said the U.S. dollar "won't go away in a hurry" as a reserve currency as long as it is "reasonably stable and convenient and usable."
"It's very convenient to have something that you can use right away for another payment. And that's what the dollar serves," he said. "And that's why people hold so many dollars. They may like it or not like it, but it's convenient."
He said the countries that hold massive quantities of greenbacks will act prudently unless the U.S. doesn't "give them any basis for confidence in the dollar, if we really had a destructive policy, then they're not going to act that way."