Raising taxes creates jobs!

At least that is the clear implication of what Democrat Rep. Bill Pascrell (D.-NJ) said in an interview in the last half hour. Interviewed live on FNC, the Congressman rather harshly criticized the Republicans for proposing only spending cuts as a factor in raising the debt ceiling ("a term that most people outside of Washington have probably never heard of before," remember).

Spending cuts alone, he insisted, will kill jobs, while - track this carefully now - spending cuts plus "revenue enhancements" (read: new taxes) will protect jobs.

Yes, he actually said that.

Now, for discussion's sake, I will stipulate that federal spending cuts might somehow raise unemployment. Certainly, if the cuts led to layoffs of federal employees those people would be unemployed, as 4,000 FAA employees found themselves just a few days ago. But I'll further stipulate that reductions in federal contracting with private companies could lead to layoffs there, too, and so on. With almost 20 percent of Americans receiving federal welfare payments and almost 30 percent altogether receiving federal money for at least part of the income, it's hard to see how deep spending cuts could not affect employment somehow.

But even if Rep. Pascrell is correct on the one hand, it is simply a non sequitur that he is correct on the other. Spending cuts will remove money from the economy and this, presumably, is why Pascrell says cuts will cost jobs. But does he not understand that raising taxes also removes money from the economy? Apparently not - for to his party, only "the wealthy" are tax worthy, and they have so much money that they simply spend it frivolously and uselessly. That's why the president rants against corporate jet deductions, oblivious to the fact that non-commercial aviation is a huge part of the national economy and creates jobs where airline hubs cannot, as Doug Mataconis pointed out in, "The Misplaced Attack on Private Jets," where commenter SteveP explained why:

I was a rigger on luxury yachts when the yacht tax was implemented. The wealthy people who were the supposed targets of the tax simply put off buying new toys. Those of us who built and maintained the yachts lost our homes. Even those that didn’t lose their homes paid a high price for the Democrats’ class warfare. That’s always the way it is. The leftist’s targets aren’t the ones who get hurt. It’s the middle class working people who provide services to the wealthy that get screwed.

Laying all that side, though, there is another fallacy in Rep. Pascrell's argument. Even ifr we stipulate (laying all reason and empirical data aside as well) that spending cuts cost jobs while tax rises save them, not any Democrat in either house has proposed revenue enhancements raising taxes more than the amount of the spending cuts, meaning that whether taxes are raised or not, there will still be net spending cuts.

So how can cutting spending by, say, $4 trillion over 10 years with no new taxes be catastrophic for workers, but offsetting those cuts by $1.4 trillion in new taxes - so that the net cut is $2.6 trillion - be the promised land?

Fact is, though, that not even Senate Majority Leader Sen. Harry Reid is insisting on new taxes anymore, although he does want to include $1 trillion already slated to be cut as part of his proposed $2.7 trillion cut, which Sen. Mitch McConnell accurately called a gimmick since that $1 trillion is already in the baseline.

Richard A. Epstein pointedly observes,

Distressingly, neither the president nor the Democrats offer any rigorous account of the optimal level of tax progressivity. Rather, the president seems to think that no matter how high the current marginal tax rates, the correct social policy is to move them upward.

For Pascrell and almost all his party, the rule is always so very simple: spending cuts bad, tax increases good, and that's that. It's all part and parcel of the progressivists' religion of our day.