A Not Funny Joke as an Illustration
So, I came up with a joke to try to illustrate the problem with the "cut taxes, raise deficit" view of policy.
Guy walks onto a used car lot. Guy has a sweater on that says, "I <3 Republicans".*
Salesman sees guy looking at 2006 Ford, marked "$10,000"
Salesman says, "Since you are a Republican, I'll cut the price to $4,000. You'll save $6,000, a 60% cut!"
Republican boy says, "Wow! That's great. Let's do the paperwork."
Salesman writes it up: "$4,000 now, and you owe $6,000, plus accumulated interest, sometime in the future when we feel like charging you."
Buyer starts screaming, "That's not what we agreed on! You said you were cutting the price 60%!"
Salesman says, "Yeah, but somebody has to pay for the car. Besides, I thought you Republicans couldn't tell the difference."
I said it wasn't funny. But why, when we "cut" taxes by X%, adding that amount to the deficit, do we feel like we are getting a benefit from the government, when if a used car company did the same thing we'd have a fit?
Angus put it really well in his post today: We are just moving money around by "cutting" taxes, it is not a tax cut at all. Yet...we are all really happy. The used car salesmen in Washington are right: We DON'T know the difference.
*(For you old people, "<3" is "heart"; look at it)
Labels: deficits are future taxes