Now that Joe Biden is becoming President, I assume that “conservatives” are going to suddenly remember that one of their core, unshakable beliefs is that deficits are bad. During the periods when this core, unshakable belief is operational, these folks will often thunder about how government needs to tighten its belt just like families do when money gets tight. There are a number of problems with this analogy, but I wanted to post an observation I made three years ago when Trump and the Congressional Republicans passed their tax legislation:
Regarding the analogies to personal finance that will be used to claim we must “tighten our belts” when this tax bill inevitably increases the deficit:
The difference between government spending and personal spending is that, in a household, the adults in the family feel free to allocate 100% of the family’s income according to the family’s priorities.With a country, the government does not (and should not) feel free to allocate 100% of the country’s income. The core question, and one not easy to answer, is what portion of the country’s income should be devoted to the general welfare. It’s something more than 0% and something less than 100%.
If you get too close to 100%, nobody is going to want to work very hard because there is no upside to success. If you get too close to 0%, quality of life will erode so much and wealth will aggregate in so few hands that the majority of people aren’t going to see the value in respecting the laws that seem mostly devoted to protecting the property rights enjoyed mostly by a small sliver of the population.
So, you know, there are good policy arguments to be had about how much taxation is wise and justified; what percentage of the nation’s income should be taxed and allocated according to government policy; and those sorts of things. But comparing government finance to family finance is pretty misleading.
With time, I think I’ve come to understand that running a branch of government doesn’t have a whole heck of a lot in common with running any type of household … or business, for that matter.
To where I hear the statement “we should run government like a business” and it elicits the same eye roll as “I plan on balancing the budget by reducing fraud and waste”.
Maybe I’m just due to learn more and feel differently again, though.
I hear you. But there’s probably some piece of common wisdom getting bandied about now that I more or less accept which will be revealed as specious over the next 10 or 20 years.
The core question, and one not easy to answer, is what portion of the country’s income should be devoted to the general welfare. It’s something more than 0% and something less than 100%… The way we are adding on to the national debt in ten to twenty years most our country’s income may be spent paying off the interest on the debt. Not sure how long the Federal Reserve can keep rates this low.
I suspect the Chinese will surpass us as the financial capital of the world in the next 10 years. The only way we can keep our number one standing if we could partner with Europe and created a Euro-American currency.
Just dreaming , if the Republican far right wing movement stays in power and they win the next two elections it could be extremely bad for our country. The anti New World Order mantra coming from Republicans no longer applies in this century. My only hope is if Mark Cuban runs as a Republican and wins, he could hold back the radical right for 8 years . He’s not a fan of Fox News (he made Hannity look bad when he laughed at him) and might not get support from right wing media. Then of course someone will have to get it thru his head the government is not a business. :Grin!