Can deficit spending be justified under certain circumstances? Yes, at times of economic stress or national emergency, but only as long as necessary to resolve the problem. The 2008-2009 recession is an example. However, increasing deficit spending no matter the reason cannot go on forever.
PAYGO is not unreasonable, especially when there are provisions to deal with those emergency situations. Many Democrats and Republicans agree. The concept is simple, make sure there is a way to pay for what you want (permanently) before you commit to it. The recent tax cut is an example of not paying for what you want, but so are Social Security and Medicare simply because politicians have failed to increase program revenue as necessary.
If you are a regular reader, you have seen me call Senator Sanders and other progressives/socialists naive. You can include Sen Warren and now Representative Ocasio-Cortez plus others. Naive is simply a nice way of saying these folks are so wrapped up in their concern for social issues they champion they simply do not understand the economic implications. A bit more cynical view would hold they don’t care.
Whether it is Medicare-for-All, free college, expanded Social Security, loan forgiveness or any other social things progressives want to do, defining how they will be paid for initially and as costs rise over time is not only reasonable, but an obligation. Using unrealistic assumptions for a program is another tool that masks projected costs over time.
[By the way, contrary to the quote below, that paying for cannot be done by taxing just the 1% or international or other corporations.]
You have heard of truth in lending. What America needs is truth in spending.
On Wednesday, a number of prominent progressives announced that they would not vote for a rule backed by Democratic leadership known as PAYGO, or “Pay As You Go,” which would require the incoming Congress to offset any new spending with either an increase in taxes or a cut in government spending. In other words, it’s meant to keep deficits from spiraling further out of control.
We know that PAYGO is a powerful tool that works to rein in spending given its success in the 1990s, which ended in a rare budget surplus. But this, apparently, is not a worthy goal for progressives.
I do not understand why the Democrats don’t have the courage of our convictions and make the case that our policies will lead to growth,” said Rep. Ro Khanna (D-Calif.). “PAYGO is to protect members in vulnerable districts who can say that Democrats are for fiscal responsibility. I’m all for raising taxes on the 1 percent and multinational corporations and stopping our excessive spending on the bad wars. But we should make an economic growth argument in swing districts instead of thinking the ’90s playbook of fiscal responsibility will work.”
What part of the fair share is yours? Note the top three percent currently pay nearly half of all income taxes.