“We need to stop spending money we don’t have,” said Paul Ryan at the Iowa State Fair on Monday. “President Obama has given us four years of trillion dollar-plus deficits. He is making matters worse, and he is spending our children into a diminished future.”
It’s a slippery word, “spending.” As Paul Ryan understands it—as do almost all of the Republicans in office—”spending” means writing a check. The federal government takes in money through taxes, then spends it on programs. This makes intuitive sense. It’s also wrong.
It’s been wrong since 2002, when the United States, after a one-year dip into the black, began running deficits again. You might argue that the Bush tax cuts, extended by the Obama administration, caused these deficits. Or that the wars in Iraq and Afghanistan did, or Medicare Part D, or reduced revenue from the dot-com bust or the Great Recession, or Barack Obama’s check-writing and tax-cutting stimulus passed in 2009. You would be right about all of these things. Once in deficit, if the federal government takes in less money, it makes up the difference by borrowing money. If it writes bigger checks, it does the same. Until the budget is balanced, it’s all Treasury bills. It’s all spending.
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