Bill Clinton thinks America needs a VAT. His recent comments to CNBC and the Peterson Institute for International Economics make clear that the former president is squarely on board with a destination-based VAT. Clinton argued that VAT is necessary to reduce the deficit and pay down the national debt. He added that VAT would help our export sector by making U.S. manufacturers more competitive vis-à-vis foreign rivals.

These comments are further evidence that our nation is on the verge of crossing an important threshold. Remember what LBJ once said about the Vietnam War? "If we've lost Walter Cronkite, we've lost the country." Same deal here. Substitute VAT for Vietnam, and Clinton for Cronkite.

Of course Clinton doesn't actually speak for the nation. But his progressive sensibility functions as a rough proxy for that segment of the population which doesn't watch Fox News. With Clinton in our camp, VAT will soon find support with half of the country. [The VAT Bastard is still working on Bill O'Reilly and the other half of the country.]

But wait a minute .... isn't President Clinton a left-leaning Democrat? And now he supports a VAT. What gives?

First, Clinton is smart. He realizes American needs an alternate revenue source if we want to maintain our current system of public entitlements. The demographics are indisputable. Democrats think programs like Medicare, Medicaid, and Social Security are worth preserving -- as do some Republicans. As of this year we can add President Obama's health care package to the list of generous entitlements that must be paid for. (BTW, the government now reports that ObamaCare will cost $115 billion more than previously estimated.) The VAT Bastard doesn't care about the relative merits of public entitlements -- we have no horse in that race. The salient point is that a VAT will be necessary if America wants to keep those programs financially solvent.

We can't tax the hell out of the rich because there aren't enough of them to fix the problem. We can't tax the hell out of businesses without rendering them uncompetitive, hurting the economy, and thwarting job growth. We can't get Congress to stop spending money because the political system is fundamentally broken. We can't print more money because the bond market and foreign central banks won't allow it. What can we do? The answer is tax consumption. VAT is the least worst alternative. Clinton gets it.

Second, Clinton is a globalist. He knows that 150 countries around the world already have a VAT and rely on it to an enormous extent. For practical purposes, VAT is the world's tax. In terms of public finance, it's the watershed development of the last half century. VAT is economically efficient and avoids the market-distorting biases of the income tax. VAT promotes personal savings and has self-enforcing attributes -- unlike other consumption tax schemes. VAT includes a border adjustment that is revered by foreign manufacturers and trade unions alike. The businesses in other countries routinely praise VAT. Yes, it involves a compliance burden, but most companies would gladly swap the extreme complexity of the corporate income tax for the relative simplicity of VAT.

Countries with VAT are well aware of its regressivity. They don't just tolerate VAT, they positively embrace it -- including countries with strong socialist orientations. Do the good people of Norway and Sweden (with their 25% VAT) not care about their poor? Every Swede and Norwegian I've ever meet seems to care profusely about the plight of low-income taxpayers. They welcome VAT into their economic lives because they want government to provide valuable services. Heck, the French flat-out adore VAT. They can't imagine a modern, civil society without it.

Clinton is a worldly guy. He knows all other western democracies depend on VAT as a necessary means to a socially desirable end. Clinton is a liberal, but he gets it.

Thank you, Mr. President, and welcome to club.