FREAKING ABOUT THE TAX CUTS – FOR BAD AND FOR GOOD REASONS – Something finally happened in US Congress, apart from paying off victims of sexual harassment by Members and Senators – tax cuts, to be precise.

I confess I like tax cuts. Unlike the left, I don’t believe that tax cuts is “stealing money” from “the people”. Government does not have any money of its own; all that it has it takes from somebody, and then gives to somebody else, having in the process consumed a fair bite out of every dollar to support itself in the standard it became accustomed to. In order to think in terms of stealing you need to believe that the government and the beneficiaries of the government’s largess deserve money more than the people from whom it is originally taken. Which I guess it’s the whole point of socialism, at least in the theory, where it all works very well.

However, I do have some sympathy with the view that tax cuts in and of themselves are not the be all and end all. It’s nice that people get to keep more of the money they earn, but what about the government finances – what about the size of the budget, the budget deficits, and government debt? (this is essentially the argument that Eichenwald makes if you read his Twitter) If you rein in the takings, you also have to rein in the expenditure, otherwise the deficits and debt keep growing from its already unsustainable heights of $20 trillion plus. These are American tax cuts so I don’t have a dog in the fight and it’s not my money to give or receive, but I would just about rather all that tax cut money be spent on starting to pay off debt (once the expenditure has been drastically cut to eliminate deficits). One of the biggest, if not the biggest, economic problems in the developed world is our governments living well beyond their means. I wish someone had the courage to start addressing this issue.