BCT Editorial – 6/25/10

This is another example of Times schizophrenia when it comes to deficit spending and debt.  One editorial complains about debt and deficit spending while the next justifies it.  That the editorial speaks of “budgetary hypocrisy” is especially humorous.  Sayings like “the pot calling the kettle black” and “those who live in glass houses shouldn’t throw rocks” come to mind.

Earlier this year we read Times editorials (“Concrete steps,” “Under control”) singing the praises of a “Pay-Go” law and how it was crucial to eliminate deficit spending.  You may recall a subsequent editorial demonized Sen. Jim Bunning (R-KY) as “a petty dictator” and “the crazy uncle in the Senate attic” when he attempted to make the Senate abide by the law.

As for the Times assertion “stimulus is needed,” perhaps it should learn what Henry Morgenthau, FDR’s Treasury Secretary during the Great Depression, said about FDR’s “stimulus.”  Testifying before the House Ways and Means Committee in May 1939, Sec. Morgenthau said, “We have tried spending money.  We are spending more than we have ever spent before and it does not work.  And I have just one interest, and if I am wrong … somebody else can have my job.  I want to see this country prosperous.  I want to see people get a job.  I want to see people get enough to eat.  We have never made good on our promises … I say after eight years of this Administration we have just as much unemployment as when we started … And an enormous debt to boot.”

Let’s look at two other facts the editorial ignores.  First, when you subsidize an activity, you get more of it.  Lefties seem to recognize this since it’s always cited by them to support subsidies for everything from cars to houses.  That’s only one reason we should not subsidize unemployment by extending unemployment benefits.

Second, the more you tax an economic activity, the less of it you get (along with the associated jobs).  Again, lefties seem to recognize this since it’s always used to support taxes on “undesirable” activities, like consumption of tobacco and gasoline.  That’s only one reason we should not increase taxes or let existing tax rate cuts expire.