An old friend—both in age and years as a friend—often says “I have a question,” and when he does, everyone listens. Think about the old E.F. Hutton commercials, which had an announcer stating: “When E.F. Hutton talks, people listen.”
My old friend and I are separated by 10,999 days—who knew?—but the age gap does not mean I can’t say “I have a question” every once in a while. So here’s mine: If America is the greatest country ever, emblematic of exceptionalism and to be revered no matter what, why are we so broke?
My questions comes to mind for several reasons. In Arizona, Governor Doug Ducey has announced his new budget, proposing higher education budget cuts of $75,000,000. He’s also playing games with K-12 funding and shows no willingness to put behind us the legislature’s shameful theft of K-12 money, and the lawsuit and judgment which followed.
Kansas just re-elected Governor Sam Brownback. Governor Brownback decided to impose on Kansans an experiment, wherein he would cut taxes drastically to see if the state got rich. It didn’t, it’s broke, and now he’s talking about taxing everyone to fix things.
Whenever President Obama or a D in Congress hints at spending 10 cents on anything which does not directly advantage the wealthiest of the wealthy 1-percenters, the Rs go into a frenzy about debt, deficits, and we’re broke, don’t you know? The latest? Well, just read Boehner Nixes Fix on “Crumbling Infrastructure” by Steve Benen, writing for The MaddowBlog on January 8. For so, so many good reasons, we need to increase the gas tax, yet it won’t happen, while the greatest country in the world has roads crumbling everywhere.
It’ll shock you, surely, that I can answer my own question. We’re not so broke! In fact, we’re not broke at all. We may have some cash flow issues, and even those are overblown, but broke. Not at all. (I’ll explain why we’re not broke in another post; for right now I’m focused on the messaging.)
What’s going on here? Several things. First, and back to another of my old friend’s pet phrases: It’s always about the money. The wealthiest of the wealthy thrive in a society which spends very little. And the wealthiest of the wealthy can send their children to private schools, live behind walls and gates, fly private, etc., minimizing the inconveniences which arise when we ignore communal needs.
Second, there’s the nominal number problem. National debt as an amount only matters in relation to the size of the economy. A billion dollar deficit in Belize matters much, much more than a billion dollar shortfall in the United States. Nevertheless, most of the economic news we get uses nominal numbers, both with respect to scale and time. Quickly, the numbers mean nothing and, usually, in a growing economy they seem larger than they are.
Third, there’s the “more is better” syndrome. On President Ronald Reagan’s watch the marginal tax rate went from 70% to 50%, and then to 28%. Some part of that rate reduction helped the economy. Unfortunately, too many, too often for selfish reasons, claim If A is good, An is better. (If A = a Beefeater martini, I might buy the concept; otherwise, it’s poppycock.)
Fourth, there’s a basic lack of knowledge about economics. Recently I read The Undercover Economist Strikes Back, subtitled How to Run—or Ruin—an Economy. By Tim Harford, the book provides an excellent and highly entertaining review of macroeconomics, which involves “the performance, structure, behavior, and decision-making of an economy as a whole, rather than individual markets.” Contrariwise, microeconomics deals with “the behavior of individuals and small impacting organizations in making decisions on the allocation of limited resources.”
Now, any competent economist will tell you the American economy involves more than a bigger version of an honest, hardworking fellow and the little missus, sitting at the kitchen table trying to figure out how to pay the bills. But politicians? Not so often. Instead, every two years we see ads in which we’re told we need to tighten our collective belt, just as we do individually. Reality? When we all tighten our belts, there’s trouble ahead!
Finally, and I know I’m leaving out plenty, in his first inaugural address President Reagan said, “In this present crisis, government is not the solution to our problem; government is the problem.” Until I checked the text, I’d forgotten about the conditional clause, as Reagan disciples have used his words, without the conditional clause, to stymie any effort to act for the collective benefit of Americans.
So, 316.8 million of us are living with potholes, crappy airports, schools in which teachers provide their own supplied, and broken systems everywhere. And 3.2 million among us are living better. Much, much better! And, all the while, we think we’re exceptional. Crazy!