Nov 092010

Our deficit is a numbers game. And I think it's a false issue. It's true that you cannot sustainably spend more than you make. But if you look over the course of even our post-modern history, and take our deficit balances as a whole, that's not what we have been doing, nor are at risk of doing.

Common sense principals apply here. You have to save for a rainy day. You also have to spend money to make money, particularly on that rainy day. You have to pay as you go, but you can manage cash flow over some “short” period of time. Waste is never helpful, but is sometimes inevitable. A vibrant economy generates more revenue. Contracting money supplies shrinks the economy. Money supplies are expanded primarily through investment and borrowing.

Most of the “deficit issues of the moment” can be tied to the other issues in the list. We can reduce military spending by reducing our dependence on foreign oil. We can also reduce it by taking a common sense, security based, criminal justice approach to the New World of Terrorism. We can reduce entitlement spending by fixing health care and by repairing the financial markets that buoy up our 401K's. We can fix taxation by invigorating our economy. We can stop spending stimulus dollars as soon as the Corporatists stop sitting on the cash they have hoarded over the past decade, as soon as regional and national banks stop punishing small business owners for the stupid lending decisions the banks made, as soon as “the others” all put that money back into our economy, instead of into the lawsuits, hostile takeovers, and lobbying actions they perpetrate on one another.

Someone has to sound the caution now, it's true. But let's face it, in this current political climate, the deficit is partly a wedge issue, a hollow one, and we all know who benefits from the strategy of divide and conquer.