Friday, January 21, 2011

Republicans and the Deficit

If you don't want to increase the deficit, you have to pay for any new government spending by raising taxes or other revenues. And if you want to go further and actually reduce the deficit, you have raise taxes by more than the new spending, right?

Not according to Charles Krauthammer, who considers the notion so absurd that he doesn't even try to spell out what's wrong with it; he simply suggests that anyone making it deserves to be "laughed out of town."

Having linked to Krauthammer's piece, I should link to some counters to his misstatements. Ezra Klein disects the six years of expenditure vs. ten years of taxes claim here. A brief summary of the CLASS Act reveals that the long term care insurance benefits will be paid for out of premiums (and thus, contra Krauthammer, won't bust the budget).

But on the central point of this post, no link is required because Krauthammer lays out the facts for us. Republicans want to cut revenues by about $770 billion over the next 10 years while reducing expenditures by only $450 billion. Democrats claim that this will increase the deficit; if Republicans want to cut taxes by $770 billion without increasing the deficit, they have to match those tax cuts with $770 billion worth of spending cuts. Krauthammer thinks this is absurd.

Krauthammer doesn't speak for all conservatives, but he is an influential conservative commentator. If he can get away with this article, I doubt that Republicans are feeling too much pressure to address the deficit. And we know from their behavior during the Bush years that most of them don't have any desire to do so.

Update 2011-01-22: In a comment on Ezra Klein's blog, Fishpeddler suggests that:

People like Mankiw appear to be tripped-up by the disconnect between what they ask for and what they actually want. Let's say someone has a budget of $100 and revenues of $50, and they really, really want to cut spending. One way of pressing for the desired spending cuts would be to insist that the budget be balanced. However, when someone comes back and says, "We did what you demanded. Revenues have been increased to $100", they feel like a fast one has been pulled on them, because the end result is nothing like what they envisioned.

I think that's it. Folks like Krauthammer are so used to pretending that their desired for spending cuts is actually a concern about budget deficits that they lie automatically, without even being consciously aware that they are doing so. So when someone calls them on the lie, they can't figure out what happened.

The only thing I would add is that most Republicans seemed fine with the spending increases of the Bush years, so it seems safe to say that a lot of Republicans don't oppose higher spending per se, they oppose spending when Republicans don't get to decide how the money is spent.


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