The entire problem with the budget is this: both Republicans (hardcore anti-nominal-tax ones and the regular brand) and Democrats don’t understand that spending is equivalent to raising taxes.  What we usually call “raising taxes” is just balancing the checkbook later on.  Once the government declares that it has spent a dollar, it has raised taxes, because that dollar (and any attendant interest that is accumulated in the span of time between spending and acquisition) must be physically acquired by one of the following “national checkbook balancing” methods:

  1. What we usually call “raising taxes” — i.e. signing a bill in congress that actually empowers the IRS to deduct one dollar from some taxpayer’ account.
  2. Printing it — which causes inflation, and therefore, all else held equal, makes everyone else slightly less wealthy. (you can argue that it has other good effects, or is better than option 1, that’s fine — it is still inflation)
  3. By refusing to physically acquire it, or defaulting, which increases the actual cost of every other dollar the government spends, which then must be acquired via option 1 or 2.

This has three implications for those congressmen who took Grover Norquist’s “no new taxes” pledge: (though it’s obvious neither he nor they interpret it this way, though that’s merely their ignorance)

  1. If they ever voted for increasing spending, they violated their pledge.  (i.e., almost all of them)
  2. If their actions lead to a default, they have violated their pledge, because it will increase the cost of “national checkbook balancing” options 1 and 2 by even more.
  3. If they do not vote for combined bills that reduce spending by a higher amount than they allocate to ”national checkbook balancing” option 1 (i.e. what we traditionally view as “raising taxes”) then they are violating their pledge as well. (there are some complicating issues here — you might not want to maintaining long term surpluses, though I think we’re currently at little risk of that, or you might not be convinced that the bill will actually cut spending, but the general principle remains)

As the current budget qualifies (at least as far as it has been explained to me) for category 3, it should be passed — and it would indeed reduce the true level of taxation, consistent with their pledge.

The final implication is that the only people more guilty than those who are hesitating to physically acquire the dollars to balance our spending in the past are those who voted to increase our spending so much in the first place, thereby making these “tax increases” (by either definition) necessary.

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