Are markets actually calling on governments to raise taxes?
It seems to me that the markets are actually calling for higher taxes. Because look -- the markets seem to want deficit reduction. Got it. But if you do deficit reduction through spending cuts you kill the recovery and send the economy into a double dip recession. So the only way to get deficit reduction plus growth is through increasing taxes. For Greece, or the UK, or Germany, or the U.S. to cut deficits through cutting spending right now would be complete insanity.