Suppose, for just a minute, that at your annual review your boss told you that, due to the economic climate and the condition in which the business finds itself, that, unfortunately, there were no raises being given out this year.
Of course, you would be disappointed.
You have worked hard all year. You have done a good job. Your review reflected that, and your boss told you that your performance had been excellent.
But, sales are down, profit is down, and there was just no money in the budget for raises this year.
How would he react if you looked at him and asked him, “Boss, how am I going to pay for not getting this raise?”
Of course, he would look at you as if you are an idiot, because NOT getting more money does not COST you money. You don't have to PAY for money that you do not get.
You have been managing on the money you have been receiving, so you will have to continue to do so. If you have been spending too much, you will have to cut your spending. But you don’t have to PAY for money that you will not be receiving. It does not cost you anything.
And, yet, this is exactly the question we are hearing from the liberal / progressives about the soon to expire tax cuts.
“If we extend the tax cuts, how will we pay for it?”
That is not the question that needs to be asked, for there is no answer to it. If they extend them, it will cost nothing, because the government does not have to pay for money that it does not receive.
Instead, the question that needs to be asked, but which they refuse to say, is:
“If we extend the tax cuts, how do we spend the money that we are not getting from those taxes?”
Now this is a question that can be answered.
You don’t. If you don’t get the money, you don’t get to spend it.