Den of the Cyphered Wolf

Sunday, July 31, 2011

Continuing to Invest in Our Future

I hate it when people use the phrase, "Living within its means" to talk about the current government debt problems.

I hate it because it's a catchy slogan that's misleading, and wrongfully assumes that government should spend money the same way a household should. The government is not a household or even a business. These things are inherently different because they have inherently different economic goals.

From my general experience the primary economic goal of a household is to pay all necessary bills while staying out of debt. The economic goal of a business is to make a profit. And the economic goal of the government is to outmaneuver the booms and busts of the business cycle on a macroeconomic scale. Not all of these things are mutually exclusive at least all the time, but sometimes they can be contradictory.

During what many consider to be the golden age of the American economy, roughly the Ike through Johnson years, the primary way for the government to get a head of the business cycle was Keynesian economics, which included government spending to invest in the nation's future.

A government unlike a household has to play the long game. When I say the long game I don't mean three or even five years down the line. I mean twenty or thirty. The American people do not realize it but we've been using and directly benefiting from the investments our grandparents made and those investments must be maintained and built upon.

That is not to say that the government was the only reason for that period's prosperity, but it did play a role.

My current objection to the national debt is not that the government, "live within its means", but that the way things are headed currently sooner or later the country is going to hit a wall where our debt will not go towards building and investing in the nation's future, but paying interest towards the debt we have already sustained.

This conversation should not be about, "having a balanced budget," but ensuring that the United States will be able to continue investing in its future.

No comments:

Post a Comment

Facebook Comments

Note: These Comments are from all across this blog.