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LostInParadise's avatar

What is the logic behind insisting revenue increases must at least match spending cuts?

Asked by LostInParadise (32216points) July 8th, 2011

This is what the Republicans are insisting on, and even then they may not go along with any revenue increases. I am trying to figure out the arithmetic behind this. It is like telling a company that every extra dollar of revenue has to be matched by at least a dollar less in expenses. Huh? If we carry the argument to its ultimate end, the government would end up with lots of money and nothing that it could spend it on.

What the Republicans are really saying is that every extra dollar taken from the rich has to matched by at least a dollar taken away from the poor and middle classes. I fail to see either the logic or the equity in this.

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8 Answers

bob_'s avatar

In a nutshell, it’s about compromise. Republicans like low taxes, and Democrats like generous social programs. The deficit is fucking huge, so both sides have to give something up.

marinelife's avatar

I agree with you, @LostInParadise! It makes no sense whatsoever.

WasCy's avatar

The logic is that we’re in a huge hole of debt, and if we don’t stop our continuous spending (overspending, since the fact of government is that spending normally exceeds revenue) then revenue increases would mean that the legislators would feel “the crisis is over; we can now spend more.

Your assumption that a government (any government) would ever have “a huge pile of money with nothing to spend it on” is completely false. It’s just a (politically) logical impossibility.

laureth's avatar

Cutting spending is what the Republicans want, especially on programs that traditionally benefit people who vote for Democrats. So by offering up the possibility of revenue increases (or a higher debt ceiling), that is, giving the other side what they want, the Republicans hope to get some of what they want. Let me put it this way. If Republicans in Congress really wanted hot fudge sundaes, they’d be asking for any revenue increases to be matched by hot fudge sundae increases. It doesn’t necessarily make sense, they just want to get something if they give up something.

And yes, I know that “cutting spending” makes sense on the surface, when you’re in a financial bind. But I don’t want to go too far into detail on this point and turn this into a political question that has little resemblance to what the OP is asking.

jaytkay's avatar

There is not logic in the idea, there is ideology. The idea that Republicans are fiscally responsible is ludicrous. Every Republican President since Nixon has set deficit records.

US federal taxes are their lowest point in decades. The deficit is largely thanks to the wars and tax cuts for the wealthy instituted by the Bush administration

The Republicans now have two goals – keeping unemployment high by preventing stimulus spending, and forcing the Democrats to cut Medicare.

And then just like 2010, they will then base their campaign on “the Democrats cut your Medicare!”

Sadly, the administration is falling for it again.

mazingerz88's avatar

The logic behind it is increase the money in the pot and then increase it some more by cutting less the amount that usually gets taken out.

ETpro's avatar

Revenue increases are much less damaging to the recovery, especially if directed at closing loopholes in corporate taxes and income and capital gains taxes on those who earn a half-million a year and up. If we balanced the current budget with nothing but spending cuts, we would drive unemployment through the roof. Every dollar the government spends goes to some government employee who shops, pays for housing, etc.; or to a corporation that uses the money to hire workers and supply the government what it ordered. When business isn’t spending, and consumers aren’t spending, stopping the government from spending too is insanity on steroids.

Preserving tax write offs for off-shoring jobs is NOT helping the recovery. It’s generating jobs, alright. Just not here. Giving corporations even more when they are currently sitting on $2 trillion in cash and not investing it is not going to create jobs. Money the government spends does create jobs.

Some spending is way more stimulative than other spending. Investing in repair of our crumbling infrastructure would be one great way to put people to work doing something we desperately need to do, and building things that yield benefits far into the future. With the housing and building construction business in the doldrums, infrastructure repair and construction would get a large group of skilled and unemployed workers back into the workforce. Paying to have a fleet of trucks carry water across country to try to equalize the ocean levels on the East and West coast would also put people to work, but their efforts would have no benefit. We need to cut foolish spending, but increase wise investment that puts people to work and builds for a brighter future.

Tax cuts for the rich and corporations are the stimulus of choice for a supply side crisis—when consumers are desperate to buy stuff, but business can’t afford to make enough stuff for them to buy. We aren’t in a supply0side crisis. We never have been in a supply side crisis. We are in a demand side crisis, where consumers can’t afford to buy, and so businesses have to lay off workers because they would go broke if they kept building stuff and filling warehouses with it. The tax cut for the rich rhetoric is just a big lie cooked up by wealthy people to let them get far more wealthy at the expense of everyone else.

jerv's avatar

Considering some of the other stuff they have been pulling as of late, the best logic I can see is domestic terrorism. They want what they want, and are willing to hold our population hostage and tank our economy if we don’t accede to their demands.

They don’t care who they hurt, what sort of future our descendants have, or anything else, and unless/until we get some real Conservatives in to replace these solipsistic money-grubbers that call themselves “Republicans”, there isn’t a snowball’s chance in hell of me voting GOP.

Another possibility is that they are bat-shit insane, but I honestly doubt that the BSI crowd is more than a minority. While I normally live by Hanlon’s Razor, this time I have to go with malice over stupidity.

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