Diary

"Fully paid for" - words to loathe

The small-business aid bill is fully paid for. So our exalted President says.

The state-and-local bailout bill was fully paid for. Nancy Pelosi said so, although Polifact thinks she lied.

A border security bill was fully paid for, at least according to Chuck Schumer.

What do all of these have in common? They’re all contemptible lies. As is the case every time those ugly words are uttered. “Fully paid for” in the current lexicon means this: the Congress, in its infinite wisdom and surpassing mercy, has found a group of people less politically connected, and they’re going to take more money from that group to give to people they like better.

That’s it. It’s not about the deficit. Do you really think that the “teacher bailout” is deficit-neutral? That the massive increases in taxes on corporations will magically have no effect on the economic activity of those corporations? That weakening our military at this time by cutting routine appropriations won’t cause a sudden need to escalate later? Or that state and local governments won’t be back for more when this runs out?

We don’t have a major federal deficit simply because Congress chose to increase spending and The One signed the increases. The deficit has two components: the revenues available, and the spending. And the revenues have plummeted with the undead recession. Every tax hike, every new government regulation, and every new uncertainty introduced in a law passed before it can be written just makes it that much harder to increase economic activity. When a fifth of your labor force is out of work, done trying, or working for minimum wage when they used to have a career, you have a problem you can’t solve with “pay-go”. And if your corporations are drowning in red tape, cut off from capital, and forced to spin off their foreign operations, you can increase tax rates all you want, but your revenues are going to continue free-falling.

So when I hear that Congress has found another group of victims to pay for their latest harebrained scheme, I don’t relax and think “wow, the deficit at least won’t increase.” I think about the unintended consequences of legislation. I think about the unabashedly hostile attitude of some members of Congress toward economic success. I think about the profoundly limited intellectual capacity of others (has Guam capsized yet?). And I hope in my heart of hearts that November will come soon and that we can be done with this insanity.