ECONOMICS 536
or, Why You Should Never Trust an Economist
January 26 th, 2005 - 02:42 [Z-5:00]
For those of you who know me, you know that I am the son of government workers. For 16 years, I lived with the idea that there was only so much money to go around. I am also the son of Depression Survivors. That meant, when you get a job, stay in it for as long as you can. Also, it would be a better world if everybody could make the same amount. Of course, it's best if your earnings are in the top salary range, too.
Unfortunately, the great government jobs went to friends of Fritz and, occasionally, to friends of Strom. These days, they go to sons and daughters of political donators. My dad honored and loved Donald Russell, but he was also a blue-dog Progressive. Still is. You get the picture. Suffice it to say, I never got any of those jobs. Dad did OK, though, because he had friends who liked him and thought he did a great job and helped him, in spite of Fritz and LBJ and Nixon and Carter.
To this day, he fervently believes that government creates jobs. No evidence, no past history, no logic, not even an act of the Almighty will steer him away from this belief. And in all other things he is a buck-stops-here, honest-as-the-day-is-long, loving father and husband, and dedicated conservative. I honor and care deeply for him.
But we differ when it comes to economics.
The CBO, when it comes to economics, is like my dad.
Even after many, many years of Conservative majorities, these people cling to the concept that there is only so much money in the world, and that you can't grow your way out of a recession or a deficit. And there is a simple explanation as to why. It goes like this:
When people go into debt and succeed, they make their debt up. They succeed by doing something that makes money. Their money comes from one of three sources: existing money, money that has been earned, or borrowed money. The borrowed money comes from lenders, and if they are successful, they get their money back plus interest.
Success is critical to a vibrant, growing economy. Money is created by debt and successful paying off of that debt. It works for individuals. It works for counties and states. It works for nations.
Now, the CBO, the Congressional Budget Office, thinks that this is not so. Otherwise, the poor schlub who heads it up would never have made a statement such as he made today. "You just can't keep on borrowing and borrowing," sez he.
Yes, of course it's all politics. What else would it be? The very fact that the story comes from the Los Angeles Times, should tell you how it will be slanted. And of course, it comes right after the President asks for another 80Bil to fight the war on terror.
The argument over whether we ought to be fighting terrorists is for another day. Frankly, I'm for it. But we'll talk later.
Anybody who actually says they think we can't make up two or three or even four trillion dollars over ten years, is trying to sell you something. But so what? Debt borrowed by successful people causes wealth creation.
Did he mean that the United States is NOT successful? No. Our friend, Mr. schlub is being overly cautious. Needlessly cautious.
Of course there are going to be bad days as well as good days. But wise people always have reserves and plans for the bad.
Did he mean that W is stupid? Certainly, the LATimes thinks so. Except when they think he's a brilliant evil genius.
Then, again, maybe he has Barbara Boxer balance his check book.
