Recall that I invited contestants to “write a short, one or two paragraph explanation of this obsession with budget deficits and what it will take to put that concern back in perspective.”
I’ve read through the entries and enjoyed every one of them (h/t; HC, who helped). Here are some highlights:
To RC, deep thought award:
Deficit obsession is a manifestation of the ancient notion that monetary wealth is a thing with an objective, fixed value in itself totally independent of the culture in which the tokens symbolizing wealth are stored. If only we were to dip into the treasure chest to extract the strictly finite quantum and apply it properly, all would be well.
To foosion, get-your-priorities right award:
It’s important to keep this thought front and center and not get lulled into focusing on the budget deficit. Fix the economy and the deficit will take care of itself. Fix health care spending and the deficit is a non-issue.
Also, I-hope-he’s-right award: “Normal people will stop caring when everyone stops screaming about the deficit and when the economy improves.”
Tom won “great analogy, #1”
The obsession with deficits is entirely a Trojan horse. It’s designed to get inside the budget negotiation walls and once inside out pop a bunch of rich guys that hack away at social programs.
[Ted made a similar point: The real issue for most Rs is not the deficit. It never has been. The real issue for most is that taxes are too high.]
Sidney hits on one of my personal favorite points:
The second reason why the Deficit will hit above its weight is that the American people have been sold the fallacy that government, like businesses and families must balance its budget. The obvious truth is that businesses and families do not balance their budgets, hence the trillions of corporate and consumer debt. The proper policy is for government to borrow money to finance capital projects which have long term benefits and to replace private sector spending when that spending is insufficient. However this is politically inconvenient for those who argue against government intervention in the economy, and their command of the public debate will prevent rational discussion of the Deficit.
Jill wins great analogy #2, with a folksy tale of Keynesian economics:
The local town officials, to improve the view of the waterfront properties, allow the dismantling of the decades old seawall. The Superstorm of the Century sweeps in and the storm surge plows 2 miles inland. Now Mr and Ms Average Family, who thought they were beyond danger, find that they have water in the basement, and part of the roof got blown off. One car is under a tree limb, creating complications getting to their jobs, and even one employer has folks on furlough while the business do repairs. So the family sets priorities: the kids must still get a good breakfast into them before they head for school; time is still set aside for homework. Grandma has had to come (the rest home has no power); the family makes sure they still get her medications for her. (Times like this some basic normalcy is important.) As soon as possible, the basement is pumped out and the roof is fixed, maybe tapping those home-equity funds. While on furlough, Mr Family hires himself and his chainsaw out cleaning up downed trees. The extra cash tides them over. (There is a lot of clean-up work to do.)
The one thing they do NOT do is decide that they must get rid of their biggest debt and throw all their meager financial resources at their mortgage. In fact, they call the bank to see if payments can be deferred for a month or two.
Jan K wins the “near-term vs long-term” award:
Yes, balanced budgets are important in the long run. But saving in a crisis is foolish and suicidal. If unemployment is very high then the economy is in an unhealthy state and resources are wasted, wealth is not created that could have been, skills are lost over time. The longer this continues, the larger the damage.
MDP wins the “save-the-children” medal of honor:
Why don’t we start seriously teaching economics in public schools? Most who took trigonometry or calculus in high school probably don’t remember anything about these subjects, which are relatively complex compared to basic macroeconomics. Surely a bit of Keynesianism sexified with smart-board courseware and an Ipad app or two will have kids eager to advocate for counter-cyclical government spending…
readerofTea—who should be disqualified based on length—offers sage advice on how to cure the financial elites:
To stop their obsession with ‘the debt’, you’d have to: (1) require different accounting systems that include a social impact parameter (triple-bottom line), (2) you’d have to completely revamp campaign finance laws (a direct threat to their influence), (3) you’d have to clean up the mess that is a lot of current B-School curricula, (4) you’d need to enhance MPA (Masters in Public Policy) programs, including public finance classes, and (5) you’d need to point out that precious few of these earnest strivers actually ever built a business or service, thereby defrocking their inflated claims to business expertise.
The treasured prize was guest hosting a Friday musical interlude. Since I’m too much of a liberal to choose an individual winner, all contestents are welcome to send a link to (family-friendly) musical selection with a sentence or two of text (send it to comments on this post). I’ll try to post them this Friday!