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.
It’s an absolute and total non sequitur! The White House is pushing ahead with it’s plans for a bill that won’t increase the deficit. And Elmendorf says that a focus on deficit reduction means that this deficit neutral bill just won’t fly. Huh?
Now cap and trade should actually be more than revenue neutral, it should raise revenue. (Indeed, that’s the central attack on the bill, that it’s a tax, ie, a revenue raiser) But in order to get the thing passed we’ll have to pay out so many bribes to so many industries, it won’t represent much of a net benefit to government coffers.
You may object to government doing the things it’s doing. You may think the working poor should just suck it up when they get sick, or that we should subject Bangladesh to a horrific future in which it is plunged into the sea, but you can’t say that the motivation for your objection is accounting.
This disingenuousness drives me bonkers, particularly since, as I and others have noted ad nauseum, military spending is simply never considered a relevant part of the balance sheet. (It’s mentioned once in passing in the Politico article)
I raised this point in my feature about Blue Dogs. Blue Dogs really like to call themselves "fiscally conservative" but they’re not: they’re just conservative. In fact, one of their major agenda items is permanent repeal of the estate tax, which would enlarge the debt, and they generally oppose the public option, which would reduce the cost of the health care bill. And of course they all vote for every last defense bill that comes their way. Ask Parker Griffith of Alabama, who recently voted against health care, what he thinks about cutting spending for the military installation in Huntsville.
Fiscal conservatism and deficit concern is nearly always code speak in Washington for something else: sometimes it’s class warfare, or just a cheap partisan attack. Most often, when someone in Washington says they’re concerned about the deficit, what they’re really saying is "I would like to make sure we have a government that focuses maximally on blowing people up."