Free Markets, Free People

Embracing Paygo

Republicans and some allies are criticizing President Obama’s proposal for “pay as you go” rules that only cover new and expanded entitlement spending. They rightly point out that legislators can get around these new rules with budgetary tricks like relabeling spending so that “PAYGO” rules don’t apply.

But some on the Right have also warned that paygo will just lead Democrats to pass higher taxes. I’m not convinced that that’s a bad thing.

Don’t get me wrong: I don’t like taxes. But deficit spending is taxation — deferred taxation, with interest. If the government is going to spend a bunch of our wealth on things other than emergencies, enlightened fiscal conservatives should want the American people to see the price tag, the sooner the better.

Otherwise we’re going to continue this business of borrowing from our children to pay for our reckless spending today – that’s what a lot of those tea partiers were protesting against, wasn’t it?

So fiscal conservatives should propose even more comprehensive and stringent paygo legislation than the Democrats have. Force the Democrats to put it all on the table – lock in tax hikes or spending cuts, now.

We’re going to have to do pay the piper at some point, so how does it help to wait until a real fiscal emergency is upon us?

The longer we wait to pay for it through direct taxation, the more time we give the spenders to come up with clever ways to conceal the cost – whether through inflation, or carefully targeted taxes designed to create as little political backlash as possible. Paygo creates forced errors.

If the Democrats decide to cover the gap with tax increases, that’s an issue for 2010 and beyond. Every new big spending plan, like the Obama health care plan, comes with a surefire tax increase in the near future. And as Californians recently showed the country, even Lefty voters don’t like the prospect of actually paying for all those neat programs for which they voted.

Sure, it’s self-serving for Republicans who engaged in no small amount of deficit spending themselves to suddenly find religion on the need for a balanced budget.

But there are good reasons to suspect that this level of deficit spending (and the necessary money-printing that has followed) is going to hit us in all kinds of unpleasant ways. If we don’t commit now to eventually paying off these debts, the problems will get even worse.

So let’s do something about it – or turn the heat up on the Democrats until they do something about it. Let’s give them all the paygo and fiscal discipline they can handle, and then some.

7 Responses to Embracing Paygo

  • Sounds like one of those Alinsky rules I keep hearing about:

    Force the other side to live up to its own standards.

    O’ course, the idea that TAO is demanding Paygo is laughable.  It’s like somebody lecturing his wife and kids about thrift and financial responsibility after maxing out every credit card he has, taking out two extra mortgages on the house, borrowing $5000 from Vinnie down by the docks, AND cosigning for a $100k loan for his ne’er-do-well brother to open a strip club in Riyaad.  We’re bankrupt, and NOW he wants to have fiscal discipline even while he plans to spend us further into the hole???

    Or is this just more smoke ‘n’ mirrors like all those jobs he’s “created or saved”, to be reported as fact by a breathless and adoring MiniTru?

  • I’m coming around to this position, but from an entirely different direction.  I’m for supporting it, even in this limited sense, because it is the camel’s nose under the edge of the tent.  They’ve played the slippery slope on us enough times, and now it is time to start playing it back on them.

    To me, this would be as good a long-term play as the sunset provisions in the AWB.  Let them have to explain why PAYGO doesn’t apply to such and such spending.  The reaction of most people once PAYGO is already in place is to say, “oh, well, that’s a loophole.  We don’t like loopholes.”

  • oh, c’mon, people: don’t be so damn naive. falling for bambam’s ‘paygo’ whopper is exactly the same as when the minitru media (and roughly half the country) sighed with undisguised love when bubba had al gore think up some ways to “re-invent government”. remember all the ways government got leaner, better, smarter and yet more compassionate back in the clinton years? “wow, these guys mean business! things really will change NOW!” same old misdirection 101. never mind the $10 trillion he just pissed away – pay attention to what (he says) he’s gonna do NEXT!

    BTW, according to today’s WSJ, paygo has been in place since 2006. that’s right, when the dems retook congress, they *said* they’d be running on the principles of paygo from here on out. and they have! except for the 12 occasions resulting in $400 billion in new and extra spending that speaker pelosi decided to exempt from the troublesome notion.

    “don’t look at the gal in the cabinet – watch my hand!” “presto!” (and the rubes applaud madly….)

  • I’ll tell you why it’s a bad idea.  Because PAYGO isn’t going to include non-discretionary spending, and the flavor of most of Zero’s proposed programs are all of the big-ticket entitlement variety.  He’ll hold off tax increases until 2012 is in the bag and juice up the money supply to stave off our creditors.  The idiots who voted for him don’t understand their net worth contracting through a weakened dollar, but tax increases will anger them for sure.

    • That’s the point of my post: we should challenge him to go all the way with PAYGO, no loopholes, no waiting until after the 2012 elections before we start enforcing it.  He’s given fiscal conservatives a clear path to the high ground; all we have to do is seize it.

  • Until the tax bill comes, most Americans don’t get that programs cost money. Until their jobs are affected by new laws, say by making their employer close, they don’t get that passing green laws nilly willy affect their life.

    Taxes have been cut before, so if they raise them fine.

    The one area of caution is the creation of bureaucracies, like public insurance, which rarely die off. 

    I think we will see a great chance to implement a flat tax to “spur growth” once we have stagnated enough that Joe Sixpack figures it out. At that time, I would include a partial closure of the IRS as part of that deal – this would be popular (as opposed to closing dept. of education or something) and start some precdence.