Reading letters to the editor recently, I see the impossibility of anyone coming up with a publicly acceptable solution. The suggestions are either mutually exclusive or contain contradicting recommendations. An obvious solution to government debt is to reduce government expenditures. Whether it’s by reducing programs or reducing personnel, it ends up with the same amount of money circulating in the economy.
Every program eliminated results in less money going to someone. These some ones then lose a paying job. This in turn increases unemployment and reduces the money available to various families to spend in the economy.
Technically, the money not spent by the government will remain in taxpayers pockets. These taxpayers will then spend it on some service or product that will require an employer to hire the out of work former government employee.
On the other hand, people could spend less money, saving for a rainy day, which in turn would put some worker out of a job because his employer doesn’t need as many workers.
Those who want to shrink government forget this means less of something. Are we willing to reduce the numbers of government meat inspectors or turn the air traffic control system to the private sector?
It’s all a closed system where everything affects everything else. Most people can find some one thing they see no need for to cut out and, once they’ve done that, presume the problem would be solved as soon as the dummies in charge realize where the money is being wasted.
No one seems to think someone else want’s to cut out things we think are important. Here’s where the art of politics comes in. By knowing what their constituents think is important and what isn’t they can bargain together, each taking a negative reaction and each taking a little credit
My villain for all this is our, and the world’s, living beyond our means. As long as property values and incomes were going up we could cover our debts. But, once some sector (housing)turned down our house of cards collapsed. When this is all over we will be a more frugal society. The impact won’t be anything like that which followed the great depression but will a smaller version.