If English is ever declared the official language of the United States, the biggest upheaval will be in Washington, D.C. That’s because they don’t speak English in Washington. They speak gibberish. You may not realize that, because gibberish has the same-sounding words and grammatical structure as English. When you hear gibberish, you think you’re hearing English. But you’re not. You’re hearing a very different language. Sometimes what’s being said is entirely opposite of what you think is being said.
Let me give you some examples. In Washington, the word “cut” is frequently used when budgets are discussed. Now that’s interesting, because we English-speaking people might very well use that word in a financial context. You and I might say, for instance, that we must “cut” our monthly entertainment spending because money is tight. In English that phrase means, of course, that in coming months, we should spend less than we are now spending.
Alternatively, imagine that you initially planned to increase your entertainment spending by 10 percent. But you decide you will increase it by 7 percent instead. Is the new entertainment budget an increase or a cut over the current level? The answer depends on what language you’re speaking. In English, it’s an increase. Let’s say today you spend $100 a month on entertainment. You planned to increase your entertainment budget to $110, but you change that plan to increase it only to $107. Clearly, your budget is going from $100 to $107-an increase of $7 per month.
But none of that is true in Washington gibberish. If a program costs $100 million a year and previous plans called for a 10 percent increase to $110 million, but that is later changed to a 7 percent increase, Washington gibberish calls that a cut. How can that be? Simple: The budget was supposed to go to $110 million. Now it is changed to $107 million. That’s a cut of $3 million. Get it?
If you understand that, you should understand much of the budget discussions now going on the nation’s capital. When the Democrats say the Republicans are cutting Medicare (or just about anything else), a close look will reveal that gibberish is being spoken. In fact, the Republicans are just slowing the growth in spending and, as they proudly claim, “saving Medicare.” The budget savings are like those you realize when you buy something you don’t need that’s on sale.
That is not the only way that gibberish differs from English. Consider the term “refundable tax credit.” (I love this one.) Ordinarily, a tax credit, as you might guess, is a credit toward taxes due. It reduces a citizen’s tax bill. For example, the Republican tax bill would provide a $500 tax credit for each child. So if the IRS would have taken, say, $3,000 from a taxpayer with two children, with the tax credit, it takes only $2,000. The taxpayer is credited with 2-times-$500, or $1,000. Simple, right?
So what’s a refundable tax credit? It should mean, redundantly, that a citizen has some of his tax money refunded, right? Except that it doesn’t. It means instead that a citizen whose income is so low that he doesn’t pay enough taxes to qualify for the credit is given money directly from the U.S. Treasury. For example, a citizen with two kids and a tax liability of $500 would receive $500 from the government under a refundable tax credit. He’d get neither a refund nor a tax credit but a subsidy.
The Earned Income Tax Credit (EITC) is a good example of a refundable tax credit. If the head of a family has income below what the government calls the “poverty level,” the family gets a cash subsidy. As income rises, the subsidy declines. At a certain point, the earner stops getting a subsidy and begins paying taxes. You and I would never think to call an outright cash grant a tax credit. But that’s how it works in Washington. Using that illogic, the Democrats accuse the Republicans of raising taxes on the working poor by delaying an increase in the EITC. I recently heard the EITC called a program to offset the Social Security payroll tax for low-income workers. But in that case, it merely delays the subsidy. Those workers will get the same Social Security benefits on retirement that they would have gotten without the tax offset. If we really want to relieve workers of a harsh tax burden, Washington should abolish the Social Security tax altogether and let people save for their retirement.
Notice that the EITC works like the negative income tax, another bit of Washington-style gibberish long favored by the otherwise venerable Milton Friedman as a replacement for welfare. The word “negative” is classic Washington gibberish. Only in Washington can you hear the term “negative growth,” as in “The economy will experience negative growth this year.” If a subsidy is really a negative tax, it follows that a tax is just a negative subsidy. When April 15 rolls around next year, you can assuage your resentment by thinking that you’re not really paying taxes at all-you’re actually getting a negative subsidy. I’m sure you’ll feel better.
I noticed another example of gibberish recently. The Republicans are accused of cutting programs for the poor so that they can reduce taxes on the rich. Critics say the Republicans want to “redistribute” money from the poor to the rich. Now I know some Republicans, and for all their grand statements, they rarely cut (I’m speaking English now) programs and they rarely cut (again English) taxes. They merely slow the growth.
But that aside, let’s assume the critics’ charge is true. Would cutting programs for the poor and taxes for the rich be a redistribution of money? Programs for the poor are subsidies provided by force from the taxpayers, including the rich. That’s a redistribution! So it can’t be a redistribution to let the rich keep their money. The act of cutting taxes and ending programs simply returns to the default position. It’s a refusal to redistribute income.
While we’re on the subject of redistribution, let’s acknowledge how imprecise that word is. A re distribution implies a prior distribution . But in a market economy, income is not distributed; rather, it is received through voluntary transactions. Distribution (except in the statistical sense) implies the existence of a common income pot from which individual shares are ladled out according to a standard, whether just or unjust. Even in a mixed economy, that’s not how most income is obtained. For most people (excluding the rich and poor on the various doles), income is a function of supply and demand. Other people buy their labor services or products. The prices of those things, and thus the income of the sellers, depend on the subjective valuation of the buyers and what else is offered in the marketplace. Income is not distributed-not until the government gets its hands on it.
That point is important because many people believe income is distributed in every economic system, making our only choice the standard by which it is distributed. Advocates of the market economy must insist that in a just system, income is not distributed. There is no such thing as distributive justice.
In 1946 George Orwell wrote a famous essay, “Politics and the English Language,” which diagnosed the phenomenon I call Washington gibberish. Orwell wrote:
“The great enemy of clear language is insincerity. When there is a gap between one’s real and one’s declared aims, one turns as it were instinctively to long words and exhausted idioms, like a cuttlefish squirting out ink. . . . But if thought corrupts language, language can also corrupt thought. A bad usage can spread by tradition and imitation, even among people who can and should know better. . . . One cannot change this all in a moment, but one can at least change one’s own habits, and from time to time one can even, if one jeers loudly enough, send some worn-out and useless phrase . . . into the dustbin where it belong.”
Others, including Mark Twain and H.L. Mencken, grasped Orwell’s insight. Understanding what is going on won’t be enough to change things. But I think it is a fact that we won’t change things unless we understand what is going on.