Somewhere (don't remember where) I remember reading the theory that tax cuts increase government spending because they lower the price of government services in the short term. In other words, if we the people aren't actually paying anything in taxes, we quite rationally start asking for more and more from our government. After all, it isn't costing us anything.

Don't know if it's true, but kind of makes sense.

Roubini had a lock on recession by mid 2007 too. Looks like this broken clock is going to be right one of these years

http://www.rgemonitor.com/blog/roubini/158194/

I know. But I love Nouriel dearly -- he's wild and passionate, like an economic Roberto Benigni.