What Happens When Democrats And Republicans Compromise: More Spending

AP Obama GOP

The upshot of the imminent deal between Democrats and Republicans on tax cuts is more spending.

Extending unemployment benefits will cost $56 billion, according to the CBO [PDF]

Extending tax cuts for the rich will cost $830 billion over the next 10 years.

That’s nearly one trillion dollars in spending that wouldn’t have passed if both parties stuck to their ideals. In fact, a standoff might have stopped the extension of tax cuts for all Americans, cutting the deficit by four trillion.

Leaving aside politics, the trend is clear. Compromise leads to spending.

Consider earmarks. Congress passed $16.5 billion in outright pork last year. That’s government spending that is passed as a compromise in order to pass more government spending. Both sides get what they want, and the only loser is this ephemeral thing called the national debt.

Now consider the deficit commission plan. Before that thing ever passes through Congress, it’s going to have some important changes. Republicans are going to agree to less stringent social security cuts, and Democrats will agrees to smaller tax increases: altogether more spending.

Finally, note the unstoppable growth of the national debt. American democracy is a one-way road.

See Jeff Gundlach’s guide to the inevitable American default >

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