Thursday, December 11, 2008

Will Someone Please Explain Economics to Us?

So, I just happened across what must be the billionth conservative, elected or not, real-life or resident of the blogosphere, who's talked about how we need to drastically cut the federal budget, so that the U.S. doesn't have to borrow money from abroad. Now, presumably, people say this because they think it's an idea that could sell. The average person knows that he doesn't get to borrow billions from overseas, so why would should he let the feds? And, obviously, the vast majority of politicians would rather remain elected, rather than let themselves be wiped out for what they take to be the greater good.

What's baffling, though, is that this plan is blatantly, objectively bad. Keep in mind, this isn't a question of government spending vs. tax cuts. We already run ginormous deficits, so it's really an issue of government spending versus not government spending with the revenue we already have. That revenue, in turn, will be lower than normal, thanks to the recession - which is, in turn, caused to a great extent by people not spending. So, when the government drastically scales back spending, the recession gets worse, revenues fall, the government scales back more, the recesson gets worse, revenues fall...repeat to your liking. And it gets even worse when you consider that federal spending cuts would almost certainly cut aid to the states, which almost never have the option to run deficits themselves. So, we'd see the same, vicious cycle at state-level.

The baffling thing about this isn't that people fall for it. The average person doesn't have time to think about economics. It isn't even that there are people advocating for it - since there are people who fall for it, that's to be expected, in politics. What's horrifying is that no one is out in the public media explaining what an awful idea it is. No one has, to put in the vernacular, the balls to stand up and defend fiscal policy that's founded in reason instead of puffy-cloud, ideological hallucinations about what ought to work.

I see no reason to believe that, if you put a reasonable, educated person out there and had them explain the basic cycle through which major spending cuts would hurt everyone's pocketbooks, Americans would persist in believing this silliness. The only problem is that Americans don't discuss policy anywhere near the mainstream media, and so no one ever does that.

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