Bill Kristol Doesn’t Understand How Money Works

Bill Kristol thinks exchanging two $5 bills for a $10 is a raw deal.

Bill Kristol thinks exchanging two $5 bills for a $10 is a raw deal.

Bill Kristol, on the cost of the House health care bill:

He points out that President Obama makes it seem as if his health insurance reforms won’t add to the deficit over the next ten years. But the current House bill exceeds this standard, according to CBO–not merely by the oft-reported figure of $239 billion, but by $820 billion, and the fiscal damage would compound beyond the ten-year window. The perception that the bill is “only” $239 billion short of the goal line is due to its having been packaged with unrelated tax increases totaling $581 billion over ten years. Whatever the merits (or lack thereof) of these other income tax increases, they have nothing to do with health care reform or with “bending the cost curve”–and they don’t satisfy the president’s pledge that his health care reforms themselves would be revenue neutral.

Of course, anyone who isn’t a moron knows that money is perfectly fungible, and that the point of a “revenue neutral” bill is to have a neutral impact on net federal revenues, which the President has promised will be the case. As I argued yesterday, there’s a good reason for using health care taxes to pay for health care reform, but this is just stupid.

On another note, perhaps this confusion about fungibility is why Kristol and others seem to think defense spending is paid with Monopoly money.

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