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Some liberals/progressives I’ve come across opine that steep, drastic cuts in government spending (that of course, in their opinion, strike the middle and lower classes and don’t touch the rich) are a done deal, inevitable. Agree?
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Related to the above. Economists on the side of the liberals I mention above argue that viewing (and dealing with) government budgets and spending as the same as an individual or household budget is a tempting, but completely flawed, POV. Whether you agree with it or not, it seems that it’s certainly the way more conservative folks view the whole thing. At the very least, this seems to be a key point of disagreement between the two groups. Why are they (whichever “they” you prefer to talk about) right or wrong?
I was in Europe when the austerity talks started and the riots started. Perhaps I am out of context, but the French cuts, in particular, didn’t seem all the drastic. I know the Irish cuts are much steeper, but then again, they literally have no money. I’m unaware of the austerity measures in Spain or Portugal.
Are these a done deal? Well, with the cuts passing in France, and practically a requirement in Ireland, I can’t see how these can viewed otherwise. Oh, at first blush, England’s seemed rather bleak, especially considering that their economy wasn’t too bad. Overall, though, I believe the consensus was that it was a good move for the UK.
- Related to the above. Economists on the side of the liberals I mention above argue that viewing (and dealing with) government budgets and spending as the same as an individual or household budget is a tempting, but completely flawed, POV. Whether you agree with it or not, it seems that it’s certainly the way more conservative folks view the whole thing. At the very least, this seems to be a key point of disagreement between the two groups. Why are they (whichever “they” you prefer to talk about) right or wrong?
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I believe it’s mainly conservatives, not-well versed in Economics that believe that a government should treat its economy like a household. I’m more conservative than anything, and I do not subscribe to that belief. I also have a degree in economics, so that may have something to do with it.
The main reason we shouldn’t treat households and governments the same is because households simply do not control their currency. Households cannot inflate their worth, they can’t collect more from its family members whatever taxes they feel like, and they simply cannot peg their worth relative to another household. I believe in efficient market theory (and, no, the holy, infallible market). The sheer fact that there is a government and it free floats its own currency, means that they should also have the ability to deficit spend, among other things. The ability and the need to deficit spend are pretty complicated answers. The short version is that countries can choose to trade inflation for currency in order to deficit spend for the future (i.e. increase capital expenditures, like roads, infrastructure, education), rather than just stifling its economy with taxes. The ability to do this allows a country’s economy to be more robust and dynamic. Yes, it can lead to bubbles, inflation, and other market stresses, but for the most part, a country that can engage in and navigate through deficit spending is a stronger economy overall.
Look at it this way: do you think we would be as advanced as we are if we still stuck on the gold standard, even with the currency manipulations within the gold standard? We wouldn’t be. There just isn’t that much gold in the world. Sticking to a fixed set of currency or ability to spend is the same thing as seeing the economic pie as a zero sum game.
Well, US national debt to GDP ratio is approximately 19:20 - the amount of outstanding debt is around 95% of the country’s annual income. Househlds regularly have mortgages three times their annual incomes. So shouldn’t conservatives then be seeking to treble the National Debt? I suppose one can argue that the Iraq adventure was a step down that path.
This kind of argument is mostly why we on the Right slap our foreheads in frustration.
It was a joke.
Oh - now I see who said that - carry on.
But no matter how many times you do, it doesn’t seem to knock sense into you.
The budget is out of control, but the meme that we need to handle the govt budget like the average American runs their household budget is just unbelievably stupid. Most families in the US have huge debt:
Of course maybe we can get Joe the Plumber to help, another great conservative meme. A guy not named Joe, not really a plumber, and who apparently did not know the difference between income and revenue or understand marginal tax rates.
I remember when Conservatives were smart.
What? Because someone made a joke? Or because the right has dug a hole for themselves?
Look, I’m a fairly conservative guy on budgetary matters. But to actually espouse that government spending should mirror household economics is soundbite politics. It ignores the fundamental difference in both kind and scale between the two entities. It’s the sort of thing thrown out there to make a politician look good to those in the hustings and it’s (should be) hypocritical. If we tried running the federal budget on a ‘home ec’ basis the disruptions would make the last two years look like a cakewalk.
What I don’t understand is why did those on the Right suddenly get religion about excessive government spending after generally not saying anything while George W. Bush spent this country into the ground, including starting two wars off the books, while not even pretending to anything to finance them?
Conservatives, tired of the facts not supporting their beliefs, have now abandoned them altogether and now live in a world where making shit up is just as valid as having actual data. Their viewpoint is correct, so anything they can make up to support it has to be true.
Examples:
Homosexuality is bad, therefore saying gays molest children more often than straights must be true.
Taxes are evil, therefore lowering taxes will increase revenue.
It’s kind of liberating, I expect.
Bull. There was a lot of argument, but we went along for lack of a better alternative. The standard is the alternative, not the ideal. There was a LOT of criticism in many libertarian and conservative circlkes, and you will note that that by the end of Bush’s term, nobody cared enough to bother to go out and vote for McCain.
Come on Dewey. Don’t you remember how the Tea Party campaigns for smaller government and lower public spending terrified George W. Bush before his re-election campaign, and how there was an upswell of libertarian and conservative criticism, culminating in monthly demonstrations in DC where tens of thousands of conservatives expressed their outrage and the spendthrift nature of a white New Englander masquerading as a Texan.
You don’t remember any of that? I guess it just wasn’t ever reported by the liberal media.
The other thing is when your household is facing austerity, do you normally quit your second job, or does one member of the household stop working, so that the household income goes down? I’d think not, yet that’s what’s going on in Washington, where they’re cutting tax revenue at the same time that everyone is suddenly concerned with the deficits.
Right: When households have financial issues, they figure out ways to both cut spending AND increase income. If the gormenment should act financially more like households (not that I think that’s such a good idea anyway), then increasing revenue is not out of the picture.
Yep. And that’s one of the issues I have with ‘I’m an experienced businessman…vote for me!’ arguments as well.
If a businessman needs to balance budgets his first instinct (mine has been) is to find ways to increase revenue. Now give that man the power to levy taxes…
Alos keeping in mind that the average deficit during Bush was quite a bit lower than it is now.
I know, I know - we were in a recession, so deficits were necessary. Trouble being, we were in a recession for part of Bush’s terms as well, and I don’t see a lot of argument that therefore his deficits were justifiable.
Regards,
Shodan
Who said they weren’t? Tax cuts then were justifiable also - but the ones he put in were highly inefficient at increasing consumption, which was why employment growth was so slow. And the recession lasted only about a year - why not increase revenue after that?
(And the recession wasn’t his fault either, just to be clear.)
What we do complain about was his dishonesty or stupidity in not saying that a national security emergency, which was going to be expensive, had to be paid for. If conservatives were true to their principles, they should have been shouting louder than liberals. And it doesn’t take a lot of guts to abandon a lame duck president whose poll numbers are in the toilet. But conservatives mostly complained about the few things Bush did which were right, like not letting the financial system collapse (or more accurately, not getting in the way of those who knew what they were doing.)
I think you’re confusing debt with deficit.
Debt is fine, it can even be good. And as you cited, most households have debt. But the issue is the deficit. How many households are able to go for decades spending 10% more than they earn? And how many have unfinanced debt?
When a person takes out a mortgage the payments are usually 1/3rd of his monthly salary. But how many people then decide to take an additional mortgage beyond what they can afford (ie run a deficit to buy another house)?
You don’t see? Or they weren’t there? How much is “a lot?”