The debt hawks are to economics as the creationists are to biology.
There is no functional difference between a federal tax cut and a federal spending increase. Some might argue that federal spending is superior or inferior to private spending, though evidence for either is slim, and either has the same result. They both increase the amount of federal money in the economy. (Mistakenly called the federal “debt.”)
Further, increasing the federal money supply stimulates the economy, and decreasing the money supply depresses the economy. So it is both laughable and sad to see how debt hawks squirm between wanting a lower debt, higher taxes and lower taxes, along with less federal spending, more spending and improved GDP. As the song says, “Something’s gotta give.”
Here are quotes from the always confused editors of the Chicago Tribune, in the editorial dated 8/1/10, titled “Out of debt.”
“. . . Democrats and Republicans are very good at doing one thing: running up the debt. That’s the reason for the National Commission on Fiscal Responsibility . . . to find ways to stem the red ink.” O.K., so federal deficits are bad.
“. . . at this stage (a tax increase) would be a terrible mistake, not only for the health of the economy, but for the nation’s long-term fiscal health.” O.K., so federal deficits are good, in both the short term and in the long term.
“More likely, Congress and the president would spend every nickel (from a tax increase) – and then spend some more.” Oh, oh. Now federal deficits are bad, again.
“Nor does it make sense to place a new (tax) weight on the economy when it is already struggling to grow.” Woops, deficits are good, again.
“Congress can’t afford to indulge the notion that endless borrowing is a sustainable strategy.” So deficits are bad.
“The wisest option is to extend tax cuts for a year . . . “ Deficits are good
“. . . then see what the deficit commissions proposes to curtail our addiction to debt.” Deficits are bad.
“ . . . Erskine Bowles suggests a healthy ratio of $3 dollars in spending cuts for every $1 in tax increases . . . it’s essential if we hope to foster lasting prosperity . . . “ Deficits now are awful. Mr. Bowles “scientific” suggestion equals $4 in spending cuts or $4 in tax increases, or anywhere in between. Guarantee: He has zero data to support his 3/1 ratio, but hey, who need facts?
“ . . . while sparing the taxpayers of tomorrow an unsupportable debt burden.” Deficits are bad.
And here is my favorite: “Coupled with spending discipline, revenue measures can be on leg of the journey back to fiscal sanity. But if they are the first and only leg, they will be a fatal detour.” Huh? They are saying spending cuts and tax increases are good, but first we should have spending increases and tax cuts!
All of the above is classic debt hawk double talk. Federal debt is a taxpayer “burden,” but necessary to grow the economy, but “unsupportable,” even though taxpayers don’t pay for federal debt, and the government has the unlimited ability to service its debt.
That kind of muddy thinking is what needlessly has extended this recession and the unemployment that goes with it. Ignorance may be bliss, but it sure is harmful. As the theme at the top of this post reads, “The debt hawks are to economics as the creationists are to biology.”
Rodger Malcolm Mitchell
No nation can tax itself into prosperity