Ocasio-Cortez: We Have To Break "The Mistaken Idea" That Taxes Pay For All Spending

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Rep. Alexandria Ocasio-Cortez (D-NY) declared that we must "break the mistaken idea" that taxes pay for 100% of government spending in an interview with NPR's Steve Inskeep on Thursday to promote her 'Green New Deal' legislative proposal.

"The first thing that we need to do is kind of break the mistaken idea that taxes pay for a hundred percent of government expenditure. It's just not how government expenditure works," Ocasio-Cortez explained.

Ocasio-Cortez believes that the economy will grow if money is borrowed to make an "investment" in the Green New Deal and it will eventually pay for itself. The host reminded Ocasio-Cortez that thinking is exactly what was behind the Trump tax cut -- something she opposes -- that it will pay for itself, and it "hasn't turned out to be true at all."





"You're talking about things that obviously would cost a lot of money. I know you'd rather think of it as an investment rather than a cost, but it is just certainly a lot of money. You don't specify where it's going to come from, other than saying it will all pay for itself," Inskeep said to Ocasio-Cortez in the interview.

"I think the first thing that we need to do is kind of break the mistaken idea that taxes pay for a hundred percent of government expenditure. It's just not how government expenditure works," Ocasio-Cortez answered.

"We can recoup costs, but oftentimes you look at, for example, the GOP tax cut, which I think was an irresponsible use of government expenditure. But government projects are often financed by a combination of taxes, deficit spending and other kinds of investments - you know, bonds and so on," the freshman Congresswoman explained.

"I get that. But deficit spending is borrowing money that has to be paid back eventually through taxes," Inskeep said. "So you're saying borrow the money, make the investment. The economy will grow. It will pay off the debt."

"Absolutely. Because we're creating jobs," she answered.

"I do have to say, you mentioned the Republican tax cut. They said the same thing about the tax cut - let's do this tax cut. The economy will grow. It's going to be great. It's going to pay for itself. Hasn't turned out to be true at all," the reporter reminded the Congresswoman.

"Absolutely," she responded. "And I think that that is an important distinction to make because when they were advancing that cause, they had no evidence to say that these things were going to happen. But we actually do have the evidence. For every $1 invested in infrastructure, we get $6 back."

Transcript, via NPR:

INSKEEP: You can find the Green New Deal resolution on our website today. NPR is the first to publish this call to transform the economy. It's a resolution calling for massive increases in renewable energy production, like wind and solar. It would have the United States set a goal to become carbon neutral in 10 years, which is a very ambitious timeline. This resolution says what should be done but offers few specifics on how to do it. That would have to come in later legislation. Instead, the congresswoman aims to promote big goals.

Why, in this resolution, do you make a point of saying the United States bears disproportionate responsibility for the problem?

OCASIO-CORTEZ: Because I think we do. And if we want the United States to continue to be a global leader then that means we have to lead on the solution of this issue. And I think that it is completely wrong to point fingers at other developing nations and to say, well, China's doing this and India's doing that and Russia is doing this, when we can just choose to lead and we don't have to hold ourselves to a lower bar.

INSKEEP: You're talking about things that obviously would cost a lot of money. I know you'd rather think of it as an investment rather than a cost, but it is just certainly a lot of money. You don't specify where it's going to come from, other than saying it will all pay for itself.

OCASIO-CORTEZ: Yeah. I think the first thing that we need to do is kind of break the mistaken idea that taxes pay for a hundred percent of government expenditure. It's just not how government expenditure works. We can recoup costs, but oftentimes you look at, for example, the GOP tax cut, which I think was an irresponsible use of government expenditure. But government projects are often financed by a combination of taxes, deficit spending and other kinds of investments - you know, bonds and so on.

INSKEEP: Well, I get that. But deficit spending is borrowing money that has to be paid back eventually through taxes.

OCASIO-CORTEZ: Yeah. And I think it - I think that is always the crux of it. So when we decide to go into the realm of deficit spending, we have to do so responsibly. We ask, is this an investment or is this actually going to pay for itself?

INSKEEP: So you're saying borrow the money, make the investment. The economy will grow. It will pay off the debt.

OCASIO-CORTEZ: Absolutely. Because we're creating jobs.

INSKEEP: Although, I do have to say, you mentioned the Republican tax cut. They said the same thing about the tax cut - let's do this tax cut. The economy will grow. It's going to be great. It's going to pay for itself. Hasn't turned out to be true at all.

OCASIO-CORTEZ: Absolutely. And I think that that is an important distinction to make because when they were advancing that cause, they had no evidence to say that these things were going to happen. But we actually do have the evidence. For every $1 invested in infrastructure, we get $6 back.

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