This strikes me as not only jaw-droppingly commonsensical, but a striking illustration of how “fiscal conservatism” is linked to the atomistic RW idea that “There is no such thing as society,” only individual economic actors. For an individual, minimizing personal debt might make sense. But very different considerations apply to sound fiscal decisionmaking in a family, a business, or a government. Families and businesses saddle themselves with long-term debt to get ahead all the time, and usually they do get ahead that way as they could in no other. Why shouldn’t countries do the same? Especially as, while families can lose their homes because of a bad job market, and business ventures can go bankrupt for all kinds of unforeseeable reasons, most governments really are too big to fail.
I agree with the article (just read your quote quickly though).
You are confused about a couple of things, but I’ll clear it up for you. You seem to think that fiscal conservatives just want the government to spend less money, and therefore get pissed off about increasing deficits. But that is not a good description of fiscal conservatives in my experience. I think most people who describe themselves as fiscal conservatives whant a limited government. Therefore, they don’t exactly care about the absolute level of government spending, or whether it is debt-financed or financed by taxes. What they really care about is what the money is spent on–they think government should only do certain things.
I’ve most often seen the position that government should not use deficitn spending descrbed as being “fiscally responsible.” The concepts of “fiscal responsibility” and “fiscal conservatism” often get confused in debates. For example, a fiscal conservative will say that government should be smaller, and someone will counter by arguing that Bush used deficit spending, thus conflating the two concepts.
:dubious: Your (idiosyncratic and indefensible) definition associates “fiscal conservatism” even more closely with the “There is no such thing as society” bullshit. You really don’t want to go there, not if you want to defend “fiscal conservatism.”
Every whore has a sad story like every government has a story about why exactly it is that it should not be restricted by a balanced budget. So far you’ve had a deficit since more or less always. When do you think you’ll come around to paying it off? I wonder how much merely the interests costs you. Greece also has a sad story.
Every generational owner of the family business should make sure they don’t leave it in a worse condition that the one they received it in, and not capitalize it a spend the hard earned money of past generation on a few short years of spending bliss.
The golden ideal of government is to run a balanced budget. That means that net inflows meet net outflows, including debt payments. In reality, we find it very hard to do that. Still, this should be the government’s financial goal.
I disagree that government should be run like a business, at least not like a “for profit” business. Most business look to grow and increase income. I think government should do the opposite. It should seek to stay compact and minimize incomes to those required to maintain it’s ideal size.
The big debate on government really comes down to what size it should be and what should be it’s goals. In the USA we have a lot of goals, such as looking out for our “national interests” that don’t always jibe with small government. For example, Rand Rover, in another thread, says that all programs should shrink, except for the military. Others would be happy to see the military shrink, but would like to increase some of the government welfare programs like medical coverage and social security.
Personally, I’d like the government’s chief goals to be regulation and enforcement, not directly administrative, wherever possible.
So, if your idiot older brother inherited the business and cut prices to try to increase buisness (which didn’t work) and as a result let the inventory get old and the plant get dilapidated, you shouldn’t borrow to set things right and try to get the business on an even footing again?
We all know who the idiot brother is, don’t we?
Are you saying that the true reason for the Bush deficits was to put the country on such poor financial footing that we wouldn’t be able to afford feeding the poor and supporting those who need help? Because that is a very plausible explanation. They couldn’t be so moronic that they thought not paying for the war would somehow be missed, could they?
Ever since Hoover we know that it is not fiscally responsible to cut government spending in a recession.
Perhaps, but I don’t really care about your little inter-party family bitching while the ship sinks. As far as I’m concerned all the brothers look remarkable the same to me and the idiots are the ones that put the idiot brother in the driving seat. And of course the end result will be something like Greece. A state where you are so indebted that you can’t borrow anymore to save your mother. Somewhere before that borrowing becomes a very bad idea.
Way to duck the question, Rune.
While the article is correct, the comparison did not need to be shifted from individuals to small businesses to make sense. The same applies to individuals. Ideally, you should be saving as much money as possible during good economic times so you can safely do some deficit spending when times are bad. That financial advice is sound on every level, right down to individuals. Just because most individuals can’t or don’t do it that way does not mean it’s bad advice.
Except that businesses create wealth. Government redistributes wealth. Borrowing to create wealth is good, assuming you have a good business plan. Borrowing to redistribute it is not.
False dichotomy. In a business, the work that “creates wealth” is not done by the workers on the assembly line alone, but by all the foremen and administrators and executives who do what is indispensable for the parts to be placed in front of the workers for assembly. In a social context, the agents of government – e.g., police officers and firefighters and soldiers who protect the nation’s wealth, and all the bureaucrats who make sure roads and infrastructure get built and maintained to facilitate economic activity, and all the tax collectors who make all of that possible – are no less “wealth creators” than are private business enterprises. Take all that away and you don’t get Libertopia, you get Somalia, an environment where very little wealth-creating activity is practically possible.
As a self-described deficit hawk, I disagree with the OP’s article wrt its devil-may-care attitudes about the implications of future debt.
The Salon article implies that the ‘immortality’ of government provides us the ability to kick the can down the road ad inifinitum, equating that to business long term debt. But two important differences:
- the ever increasing impact of debt service on the fed budget (FY08 actuals: interest was 8% of our budget, FY19 projection: interest is 14% of our budget, shrinking non-defense spending from 18% to 14%, and defense spending from 20% to 16%)
- the negative effects that inflation will visit on the US because of the increased borrowing, crowding out a lot of possible private sector investment, which creates wealth far more efficiently than the public sector can manage
My guess is that if a private business had debt service taking up such a giant, and ever growing, slice of their income statement and balance sheet, with no sign of hope anywhere in our lifetimes, it’d be a penny stock.
Also, redistribution of wealth does facilitate economic activity, which itself is a form of wealth creation. Think about it: Business can get no revenue without customers. The poor are nobody’s customers until they have money, and many of them will get it only from welfare and food stamps.
The same applies to retirees dependent on Social Security. It would be a major economic disruption, if some age-selective plague suddenly killed off all Americans over the age of 65. Certainly it would cripple the economy of my state – lots of retail businesses here sell to retirees, and there are whole specialized local industries catering to their needs – construction and management of retirement communities and nursing homes, physicians specializing in gerontology, etc. All of these have young, working employees, spending their paychecks and paying taxes and keeping the wheels going round and round. All of that is possible because of the FICA deduction from your paycheck, if you’re a young, working American; and, from your POV, that tax is therefore worth paying, now, for its economic benefits to you and to the economy in general, regardless of whether you live long enough to collect Social Security or not.
This is of course why the dollar has strengthened, right? Notice how the market doesn’t like that, you strong dollar is great types. Odd, isn’t it?
Given the oft-mentioned difference between Democratic and Republican administrations in economic growth (Dems win) it appears that one set does a better job of running things than the other.
Then you agree that government borrowing for infrastructure improvements and other ways that facilitate the growth of wealth is good? I won’t repeat what BrainGlutton said about the benefits of increasing consumption - failure to recognize this was why Bush’s tax cuts were so ineffective.
Clearly, the only answer is to cut prices more, and spend less on the plant. Oh, and send some guys over to wreck the factory down the street, the one that makes a totally different product. That’ll work.
No, I think the question led us to what we have today. BAILOUTS. Bad ones to boot.
The idiot brother would be your typical bank. The other idiot brother would be the federal government trying to fix it’s own mess.
This is so nonsensical that I think everyone should just not pay attention to anything you have to say on the topic of economics or government spending ever again. Of course government can create wealth, and there are plenty of examples of it doing so, such as when the government creates something that has positive externalities (such as the internet or the highway system) or creates property rights (such as trademarks or copyright).
Now, it is true that all government action is probably redistributory, simply because not everyone pays the same amount into the government or uses the same amount from government, but whether or not something is redistributory is a distinct issue from whether or not it creates wealth. A program can certainly be redistributory and create wealth at the same time. But, maybe you’ll start telling me that the Louisiana purchase + homesteading acts + government projects to pump up the Ogalla aquifier completely resulted in no wealth creation for the Midwest.:rolleyes:
Seriously, go pick up a history and an economics book before you spout this kind of nonsense.
BrainGlutton, I edited your OP to trim the quotation from the Salon article. When you’re quoting a published work in a post, please use just enough to give a reader the gist of it and link to the rest. You used more than a third of the article, which I think it more than fair use (or readability) would reasonably allow. Please keep this in mind in the future.