Wise Boy (aka Ezra Klein) is at it again: destroying the meaning of words in the best Orwellian tradition in support of statism. Wise Boy is one of those liberals who confuses matters by calling government spending “investment” or “insurance.” And he loves to equate tax expenditure with government spending, which allows him and other liberals to argue that if Republicans really want to reduce spending, they should just raise taxes (see my post on this latter point here).
Not one to rest on his laurels, Klein now seeks to undermine the meaning of the words “deficit” and “debt.” Taking a page from former Treasury Secretary Larry Summers’ playbook, Wise Boy explains that if we don’t spend on infrastructure now, we’ll just have to do it later. According to Wise Boy and Summers, to defer maintenance on infrastruc-ture burdens “future generations,” and so they’ve decided that we should call this bur-den “debt.”
After defining “debt” as deferred spending, Klein then argues that to reduce the national debt, we should increase borrowing and spending now. Got it? On Klein’s planet, more borrowing = less debt. Of course, this is so incoherent and stupid that Klein cannot possibly believe what he’s saying and his conclusion is best understood as sheer liberal duplicity. Not to mention it serves as a nice example of what liberals really think about the intelligence of Americans.
Wise Boy argues that borrowing more for infrastructure spending is a good deal these days because real interest rates are negative. As Klein explains: a negative interest rate “means markets are so nervous that they will literally pay us to keep their money safe for them.” But why are markets so nervous in the first place? Could it just possibly be due to the uncertainty caused by the central government as it continues to borrow, spend, and increase the debt?
Klein’s reasoning actually could set up a negative feedback loop: excessive government borrowing and spending makes markets nervous and leads to negative interest rates. This in turn leads to greater borrowing (if we take Klein’s advice) and a larger deficit, leading to more market nervousness, & etc. until the economy falls apart. But don’t expect Klein to consider any of this: it would mean questioning his unrelenting faith in big govern-ment.
As we’ve seen, Klein ultimately argues we should spend more now on infrastructure because it will be more costly in the future. So why the obfuscation? Can’t he just state his position without the deception? By the way, his argument is just another version of liberals saying trust us: in exchange for more spending now, we’ll cut spending in the future. Yeah, sure.