Higher taxes: a missed opportunity?

I’ve heard quite a few people say that if interest rates had been higher over the last decade then the finance and housing sectors of the economy would have been steadier, and thus less likely to crash in a big way. I’ve also often heard it said that if public spending hadn’t increased so much, the government’s budget deficit would be smaller and so we’d have more scope for fiscal stimulus now.

Nobody, to my knowledge, has suggested that higher taxes (in the right place) might have helped to reduce both of these problems. Funny, that.