Amidst this year’s fake debt/deficit crisis, political actors of many stripes compared the federal government’s budget to the budget of the average American family. (Because, of course, in order for the average American to understand complicated political and economic issues, said issues must be dumbed down and be made relatable.)
Politicos from President Obama to congressional leaders to Tea Party back benchers to people who are famous for being famous have made the case that when times get tough for average Americans, families cut back their expenditures. Our leaders have made the case that when mom loses her job or when dad’s hours get cut back, and family income falls, family spending gets cut back, too.
(Except that’s not how things work for families in this country. When enough money isn’t coming in from week-to-week, American families borrow--through home equity loans, credit cards, or payday lenders. American families have mortgage and car payments to make, along with child care, groceries, clothing, and transportation. These costs are pretty static; unless a person is intent on defaulting on her mortgage, one can’t very well cut back on one’s mortgage budget from month to month. It’s the average family’s equivalent to the federal government’s mandatory spending programs. Are this country’s political leaders really so far removed from average people, or statistics about average people, not to know that?)
President Obama, Speaker Boehner, and countless others claimed that the federal government needs to behave like an American family, and “tighten its belt” by cutting government expenditures in the face of a large budget deficit. Congressional Republicans, particularly Tea Party-backed House members, have stridently opposed raising extra revenues (read: increasing taxes) in order to close the deficit and avoid further federal debt and advocate cuts only.
Now, of course, opinion makers on both the left and the right have pushed back at this absolutely inane analogy. But, what if we were, for the sake of argument, to extend the family-government analogy a little further?
First, if banks and governments around the world were willing to lend your family money for a real interest rate of around--oh say, zero percent for ten years, wouldn’t your family take the money and use it for useful things?
Second, if your family could print its own fiat money, and use it to buy real goods and services, perhaps even getting other people back to work, wouldn’t your family do that?
Third, (and this one is for the Tea Partiers), if someone offered your family more income (or if the government sought to increase revenues), say for a raise or a new job, would you really turn it down? “No, thank you, I’d prefer to cut my family’s expenditures on milk, eggs, and diapers, rather than take the extra income. Austerity is the only way for my family to grow in these tough times.”
Could it possibly be that a combination of revenue-killing regressive tax cuts, unfunded wars, and a persistent economic downturn has created the federal government’s current deficit/debt situation? No? It’s that we’re spending too much money on helping feed poor children, making sure prescription drugs are safe, and investing in future infrastructure? Oh!
What a wonderful world we’d live in if only everyone saw the logic of austerity as clearly as the Tea Partiers do!
Politicos from President Obama to congressional leaders to Tea Party back benchers to people who are famous for being famous have made the case that when times get tough for average Americans, families cut back their expenditures. Our leaders have made the case that when mom loses her job or when dad’s hours get cut back, and family income falls, family spending gets cut back, too.
(Except that’s not how things work for families in this country. When enough money isn’t coming in from week-to-week, American families borrow--through home equity loans, credit cards, or payday lenders. American families have mortgage and car payments to make, along with child care, groceries, clothing, and transportation. These costs are pretty static; unless a person is intent on defaulting on her mortgage, one can’t very well cut back on one’s mortgage budget from month to month. It’s the average family’s equivalent to the federal government’s mandatory spending programs. Are this country’s political leaders really so far removed from average people, or statistics about average people, not to know that?)
President Obama, Speaker Boehner, and countless others claimed that the federal government needs to behave like an American family, and “tighten its belt” by cutting government expenditures in the face of a large budget deficit. Congressional Republicans, particularly Tea Party-backed House members, have stridently opposed raising extra revenues (read: increasing taxes) in order to close the deficit and avoid further federal debt and advocate cuts only.
Now, of course, opinion makers on both the left and the right have pushed back at this absolutely inane analogy. But, what if we were, for the sake of argument, to extend the family-government analogy a little further?
First, if banks and governments around the world were willing to lend your family money for a real interest rate of around--oh say, zero percent for ten years, wouldn’t your family take the money and use it for useful things?
Second, if your family could print its own fiat money, and use it to buy real goods and services, perhaps even getting other people back to work, wouldn’t your family do that?
Third, (and this one is for the Tea Partiers), if someone offered your family more income (or if the government sought to increase revenues), say for a raise or a new job, would you really turn it down? “No, thank you, I’d prefer to cut my family’s expenditures on milk, eggs, and diapers, rather than take the extra income. Austerity is the only way for my family to grow in these tough times.”
Could it possibly be that a combination of revenue-killing regressive tax cuts, unfunded wars, and a persistent economic downturn has created the federal government’s current deficit/debt situation? No? It’s that we’re spending too much money on helping feed poor children, making sure prescription drugs are safe, and investing in future infrastructure? Oh!
What a wonderful world we’d live in if only everyone saw the logic of austerity as clearly as the Tea Partiers do!
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