When Is a Cut Not a Cut?

This is cross-posted by Abe from DLMSY. Hope that's OK, PTG. :)

This caught our ear in last night's "debate" between John McCain and Barack Obama. The question is from Teresa Finch about why either of them should be trusted with our money. Good question, Teresa. This is part of Obama's answer (emphasis added):

Transcript of second McCain, Obama debate - CNN.com: "... And so while it's true that nobody's completely innocent here, we have had over the last eight years the biggest increases in deficit spending and national debt in our history. And Sen. McCain voted for four out of five of those George Bush budgets.

So here's what I would do. I'm going to spend some money on the key issues that we've got to work on.

You know, you may have seen your health care premiums go up. We've got to reform health care to help you and your budget.

We are going to have to deal with energy because we can't keep on borrowing from the Chinese and sending money to Saudi Arabia. We are mortgaging our children's future. We've got to have a different energy plan.

We've got to invest in college affordability. So we're going to have to make some investments, but we've also got to make spending cuts. And what I've proposed, you'll hear Sen. McCain say, well, he's proposing a whole bunch of new spending, but actually I'm cutting more than I'm spending so that it will be a net spending cut."

Is there anyone sentient who believes that last part? How can that possibly be true considering the laundry list of "top spending priorities" that he recited here and in the previous debate. McCain has put the cost of Obama's spending plans at over $800 billion, and Obama has not challenged him on that.

As far as we know, Obama has offered few, if any, specific spending cuts. During the primaries he promised to eliminate the missile defense program, but he claimed in the last debate that he now sees missile defense as essential (at least until he gets elected).

The only explanation that makes sense is: when Obama says he is cutting more than he's spending, he must be counting his plans for tax increases as "spending cuts." This is standard liberal "framing" over the last several years, which attempts to equate goverment spending with letting people keep their own money. The underlying premise, which is never stated because it's indefensible, is that all money belongs to the government. Note that an actual spending cut decreases the government's role in the real economy, while a tax increase has the opposite effect.

We can also see that idea behind this Obama statement from the debate (emphasis added):

But understand this: We also have to look at where some of our tax revenues are going. So when Sen. McCain proposes a $300 billion tax cut, a continuation not only of the Bush tax cuts, but an additional $200 billion that he's going to give to big corporations, including big oil companies, $4 billion worth, that's money out of the system.

Actually, Senator, that's money back into the system. The real system, where wealth and jobs are actually created. The system is the private sector, not the government.

Again, Obama falsely equates government spending with letting the people who created the wealth keep some of it. Note the implicit claim that continuing the current tax rates represents some kind of giveaway to individual taxpayers. Meanwhile, in LiberalThink any cut in corporate tax rates, which are far higher than in the rest of the industrialized countries, would be a giveaway to big companies, and lost forever from "the system."

What would these evil businesses do with the government's money? Expand instead of contract? Stay in business instead of folding? Employ more people instead of fewer? Hold their prices down instead of raising them? Raise wages and benefits instead of cutting them? The horror.