‘New Structural Savings’ = The New Tax Hike

The attack on the English language by the political class reached new lows yesterday. The Prime Minister announced her intention to proceed with ‘investments’ in education reform and disability insurance. She called this ‘new structural spending’. It will be paid for with ‘new structural savings’.

An investment is capital you spend that generates a measurable return, hopefully a profit. In politics, an ‘investment’ is what you call spending other people’s money on things you want because you are morally superior. Plus, the return on a public policy ‘investment’ is hardly ever measurable, and therefore the people who made it are never accountable for a ‘bad’ investment.

To be sure, when you spend money on roads, bridges, or infrastructure, there’s a real benefit, even if it can’t be precisely measured. But in the Welfare State, anything that gets called an ‘investment’ is probably a handout to somebody disguised as being for ‘the greater good.’ We all know it happens. And we all know some public goods cost money without a measurable return. But yesterday’s trickery was impressive.

Take the use of the word ‘savings’. In reality, the government means it has to raise taxes because it refuses to cut spending in light of revenue forecasts that turned out to be naïve. On no planet we’ve ever lived on where dictionaries existed was a tax hike called ‘savings’. But ‘savings’ does confuse people about what you really mean, which is that you want to raise taxes to pay for something you like but don’t have any money for.

The possibilities of the universe are infinite, however. In some universe, it is not abuse of the language to call tax hikes ‘savings’. In that universe, it’s ‘fair’ to ask people to pay higher taxes because they can afford to, even if you spent money that wasn’t yours and you didn’t have in the first place. After all, other than racking up a large Federal debt future generations will have to pay off, you can’t very well tax people who don’t have money, can you?

Dan Denning
for Markets and Money

Join me on Google Plus

From the Archives…

Gold Demand: The Great Disconnect Between Paper and Bullion
26-04-13 – Greg Canavan

Lest We Forget
25-04-13 – Greg Canavan

Praying for Government Incompetence
24-04-13 – Bill Bonner

The Cracks in Solidarity at the Recent G20 Gabfest
23-04-13 – Greg Canavan

How Central Planners are Committed to Ruining the Economy
22-04-13 – Joel Bowman

Dan Denning examines the geopolitical and economic events that can affect your investments domestically. He raises the questions you need to answer, in order to survive financially in these turbulent times.

Leave a Reply

Your email address will not be published. Required fields are marked *

Markets & Money