Capitolism

More Deficit Idiocy: Politico Edition

By Christopher Hayes

The discussion about deficits and debt in Washington is so colossally stupid and disingenuous that even engaging it makes me despair. But today's Politico so expertly packages together every conceivable Beltway Establishment inanity about "spending" and "deficits" into one glib little piece of analysis that I can't help myself. (Well, I could help myself but was bullied over Twitter into writing about it here.)

There's one big maddening conceptual error at the heart of this piece (whether committed in good faith or bad I can't say) which is to confuse relatively substantial pieces of domestic legislation with a spending "binge." See, a government, like any organization, institution, or firm has expenditures and revenues. Miraculously, it can increase its expenditures, without increasing its deficit, if it also increases its revenues. This is called "deficit neutral" and it's what the current health care bill, in all its incarnations, is. It is what the cap and trade bill will also be. Now consider this paragraph.

For starters, the White House has not dropped plans for an aggressive global warming bill early next year that will be loaded with new spending on green technology and jobs – that would be paid for with tax increases. Democratic lobbyist Steve Elmendorf says the White House focus on deficit reduction could easily kill the cap-and-trade effort. "I think this means cap-and-trade has to go to the backburner," he said.

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November 13, 2009