Tuesday, September 07, 2021

Spending

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We’ve got a really screwy way of drafting, evaluating, and passing legislation. We pretend that the federal government needs to budget like a household. We think of taxes as something the government needs (i.e. revenue) instead of remembering that taxes are there to subtract spending power from the rest of us so that the government’s own spending doesn’t push the economy beyond its full-employment limit. We hamstring legislation by demanding that the government “pay for” new spending, even when the economy could safely absorb that spending without the need for higher taxes. And we do all of this because we’ve decided that these household budgeting practices somehow serve the public interest. They don’t.

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