Collective Conscious

Bal­anc­ing the bud­get is an excep­tion­ally easy task. In fact, there are an infi­nite com­bi­na­tion of rev­enue and spend­ing lev­els that will bal­ance the bud­get: we could have the gov­ern­ment be nonex­is­tent (0% of GDP), all-​​powerful (100% of GDP), or some­where in between (say, 20% of GDP).

Say­ing “we can’t afford some­thing” with respect to the gov­ern­ment is absurd. We can always levy more taxes, espe­cially when the gov­ern­ment is only at about 20% of GDP. There’s still that other 80% out there, and in the United States, that’s quite a lot of money — on the order of like ten tril­lion dol­lars each year. We have plenty of money, and the gov­ern­ment has the right and the power to access it if need be.

The “we can’t afford it” line is sim­ply code for some­thing else — namely, “we don’t want it.” The CPC bud­get shows how we can afford almost every­thing we want: social insur­ance, fair pay­ment for doc­tors, finan­cial reg­u­la­tion, and more, sim­ply by bal­anc­ing the bud­get at about 22% of GDP. The Paul Ryan bud­get shows how we can afford every­thing they want: tax cuts for the rich, sim­ply by elim­i­nat­ing spend­ing on the poor and bal­anc­ing the bud­get at around 18% of GDP.

When they say “we can’t afford Medicare” they mean “we don’t want Medicare.” When they say “we can’t afford Planned Par­ent­hood” they mean “we don’t want Planned Par­ent­hood.” When they say “we can afford tax cuts for the rich” they mean “we want tax cuts for the rich.” You get the idea.

The pre­ferred social pol­icy dic­tates the fis­cal pol­icy. If you want the poor and the sick to suf­fer as the free mar­ket demands, you restrict the size of gov­ern­ment so it can’t help them. If you feel a moral oblig­a­tion to help those peo­ple, you make gov­ern­ment larger so it can.

What we have is a sys­tem of com­pro­mise. Right now, we give the poor a very, very small amount of help, but we also make sure not to tax the rich all that much to do it. Unfor­tu­nately the com­pro­mise falls out of bal­ance in times of reces­sion, since our tax rev­enues plum­met and and oblig­a­tions expand. The con­ser­v­a­tive coali­tion right now is using that imbal­ance as an excuse to say “we are clearly giv­ing the poor too much — we can’t afford it.” But by ignor­ing the rev­enue side of the equa­tion, they must also be implic­itly say­ing “we are tax­ing the rich too much — they can’t afford it.”

Nat­u­rally this is bunk. But regard­less of the spe­cific exam­ples vis­i­ble in this year’s bud­get debate, the over­ar­ch­ing les­son is much more impor­tant: that fis­cal pol­icy is only an imple­ment of social pol­icy. You decide what you want the gov­ern­ment to do, then you decide how to pay for it. It does not work the other way around.

So any­one who tries to sep­a­rate out fis­cal pol­icy from social pol­icy — as Ezra Klein won­der­fully illus­trates today — is pulling the wool over your eyes. If they’re try­ing to tell you it’s sim­ply a num­bers game, then they’re lying to you. The goal is not to bal­ance the bud­get. It’s to bal­ance the bud­get where and on what we want it. For us it means a higher num­ber, as we see pub­lic goods and col­lec­tive con­sump­tion to be the morally and socially respon­si­ble approach. For them it means a lower num­ber, as they are strict adher­ents to the cult of the free mar­ket, and there­fore have to claim “in the absence of gov­ern­ment sup­port, what­ever is, is right.”

Here’s what hap­pens in the absence of gov­ern­ment sup­port: the US becomes a third-​​world coun­try that gets out­sourced to. And here are some ideas as to what we can do to avoid that future.