Just Plain Crazy

February 20th, 2008 at 09:12pm Johnny Boyd 41

I want to state up front that in no way am I an economist. I don’t subscribe to Keynesian, Monetarist, or any other theory of economic policy. I am a simple children’s book author trying to support a household that is always in need of fiscal discipline and stringent monetary policy. In other words I need to go easy on the credit cards, pay my mortgage, and have enough left over to save.

I do, however, watch the gyrations of our government as it attempts to stave off what many consider an impending recession. A few weeks ago President Bush proposed a stimulus package that embodies the pure Keynesian theory of spending your way out of a recession. The next day the stock markets of every country in the world tanked. Luckily, it was the Martin Luther King Holiday and the New York Stock Exchange was closed or the Federal Reserve might not have had the time to cut interest rates in time to halt an equal plunge. No matter what attempts are made the results aren’t exactly building my confidence in government to shepherd an economy.

I don’t believe in the private sector either. The easing of government regulation on business is a major reason we find our country in this mess. Allowing businesses to “voluntarily” regulate themselves has been a disaster. This part of the so-called “Reagan revolution” has been as dismal of a failure as the rest of the conservative movement.

I will give Ronald Reagan credit for one thing, though. When he saw the huge deficits the government was running because of his tax cuts, he raised taxes. Compared to the blatantly irresponsible policies of the current administration Reagan was a true leader.

But I digress. The definition of insanity is doing the same thing and expecting a different result. Japan has been in a recession since 1986 and has tried all of the stimulus ideas our leaders are currently attempting to no avail. It raised interest rates, lowered them, and spent money on public works projects. Despite these attempts to restore its economy, its debt is now larger than its GDP, and it is still in recession.

As I admitted earlier I don’t know a lot about economics. But I do know what I would do if I found myself in the same situation as Japan or the United States of America. Being deep in debt with poor credit has only one solution –– raise revenues and cut spending. Around my household some sacrifices would have to be made. Steak would be replaced with hamburger. The Range Rover in the driveway would be traded for a used Subaru. Most importantly, I would get a second job. I would never think of spending my way out of a fiscal crisis.

An American with a bad credit rating or huge debt is in an impossible situation. Millions of Americans in this position cause credit crunches and mortgage crises. Banks don’t invest in these individuals. Likewise, a country that is considered a deadbeat is not a place that inspires confidence for investors.

In the late 1990s America was a fiscally responsible country and the party seemed like it would never end. Hundreds of thousands of jobs were created every month. Having debt under control inspired confidence in America. A policy of fiscal responsibility works as well in the average American household as it does on the national level. The United States simply must reduce spending and bring in more revenue.

America is a deadbeat country. Cutting taxes and starting a war is a contradiction of common sense. No government in the history of the world has ever attempted such an outrageously irresponsible act. One of the quickest ways to cut spending is to end the war; enough treasure and lives have been wasted on that debacle.

Allowing the Bush tax cuts that are set to expire in 2011 to expire then may be too late. America needs a shot in the arm and borrowing $143 billion from China and calling it a stimulus package isn’t the shot of fiscal responsibility the world is looking for. I don’t like paying taxes any more than the next guy, but enduring a recession is worse. Would you rather pay a little more now or lose your job and have no money period? Even if it causes pain in the short-term, raising taxes will send the signal to the world that America refuses to remain a deadbeat country. We can’t continue spending like a mall brat with Daddy’s credit card.

The federal government should be forced to spend and tax like the average American household. Americans are already starting to tighten their collective belts and our government should follow suit. Borrowing and spending to avert a crisis partially caused by borrowing and spending is the definition of…

Well, it’s just plain crazy.

Johnny Boyd is a columnist for the Snowmass Sun and the author of the children’s book for little skiers, First Tracks.

Entry Filed under: Snowmass, Politics, Family, United Post, Colorado