Tuesday, August 24, 2010

When Did We Suddenly Have To "Pay For" Things?

I feel like there is no greater illustration of the hollow GOP concern for the deficit than this exchange between Senate Minority Leader Mitch McConnell (R-KY) and David Gregory:
GREGORY: For a final time, I’ll go back to my question which is, the extension of the tax cuts would cost $3.2 trillion. That’s borrowed money, that adds to the deficit. Do you have a plan to pay for that extension?

MCCONNELL: You’re talking about current tax policy. Why did it all of a sudden become something that we, quote, ‘pay for’?

Senator McConnell may have once again darted across the McConnell Line.


Joe said...

Presumably McConnell means to dispute the absurd idea that tax cuts can be honestly characterized as a cost. (You obviously don't have to pay for tax cuts; you have to pay for the government's expenditures. It makes no difference whether you pay for it now or later.)

It's Gregory's characterization here that's misleading--he does in fact characterize tax cuts as something you must "pay for."

Joe said...

In fact, your post title highlights this absurdity! We pay for things, not for the decision not to take things.

To use an embarrassingly obvious illustration to make a ludicrously obviously point--when I decide not to visit the ATM today, is this a "cost" for which I am "paying"?

joe said...

Not to break with inter-Joe solidarity, but it certainly can a difference whether the expenditures are paid up front or not, and since we know Republicans don't cut spending when they're in power, it would definitely add to the deficit.

Joe said...

Why will it make a difference whether we pay up front? The gov't will pay an interest rate that's probably less than the return on however the money not collected is spent/invested. It'll just reflect the time value of the money (actually probably less, because the government gets to borrow at such an attractive rate).

(If we're talking big meta, in the sense that if the government were required to balance the budget it would spend yes, then I'll agree there are costs to the existence of deficit spending at large, because it frees the government to spend much more. But we're talking about whether any particular amount of deficit relative to some other amount constitutes a cost.)

Joe said...

*spend less, not yes