I try to simplify things as much as possible so I can wrap my feeble mind around complex subjects. In this case, I’m talking about the world of economics; wealth generation and wealth consumption. So let’s think of wealth generation as “making a pie” and wealth consumption as “eating the pie”.
The problem that in the US and other economic centers of the world is that we have been eating more pie than we have been making and we have done this for a very long time. So, how is it that we can eat more than we make? Obviously we’ve borrowing pie from other pie makers. We give these other pie makers a promissory note (government bond) saying that our future pie makers will pay you back with interest.
For a long time this worked out pretty good. After all, we were the worlds biggest pie maker and by far the worlds biggest pie eaters. so the other pie makers were glad to lend us some pie.
The problem came when we had to repay those that hand lent us pie with pie that we made and we hadn’t made enough pie. What could we do? Not to worry said our Federal Reserve, we’ll take care of the problem. The Fed believed that they were the best pie maker of all. What they did was whip air into the pie filling. Now the pie looked like a normal pie but it had less substance than before. The pie lenders accepted this but said they would want more interest.
As the years passed, we continued to borrow more pie so we could continue to eat more than we made. The Fed continued to whip more and more air into the pie filling until our pie was nothing more than froth. Our future pie makers now are faced with a debt of an enormous amount of pie and the lenders of pie are going to decide to stop lending.
The only moral thing for us to do is to stop eating more pie than we make and , also, find the means to make much more pie than we eat so that we can repay those that lent us pie with pie that they will accept as repayment.
Okay. Enough of the pie analogy. I want to share an article I came across at Conservative Home, which was written by Ray Streeter. The title of his article is “Deficit reduction is a moral issue, not just an exercise in economics or accounting”. Streeter says “I lay out three moral challenges facing a generation that has no choice but to confront our nation’s deficit.” Here are his three challenges:
- The rising generation needs to reclaim an ethic of personal responsibility.
- The older generation needs to put any guilt or other inhibitors aside and lead the way on entitlement reform, before they bury the younger generation under a pile of debt any more than they have already
- We all need to be willing to live with less from the government if we’re not poor…so that the government’s resources can be delivered to those who need them most.
Streeter expands on each of these challenges and I recomend that you give his article a read.
I agree with Mr. Streeter that the deficit is a moral problem that we Americans must face up-to. however, I worry that we are not yet up to the challenge. When I see things like this from E. J. Dionne Jr. of the Washington Post, it makes me want to scream.
It’s thus satisfying to see President Obama ignore the willfully naive who are wailing over deficits.
I expect that kind of crap from Dionne but I am equally aghast at some of our Republicans. This come from an article at POLITICO.
Sixty-eight Republicans, backed Democrats in defense of preserving at least reduced funding for legal aid to the poor, for example. Minutes later, 70 Republicans joined 158 Democrats on a 228-203 vote that restored $280 million for the Community Oriented Policing Services or COPS program, a favorite initiative of Vice President Joe Biden. And given the power of the firefighter lobby, the dike seemed to break when as many as 132 Republicans backed an amendment by Rep. Bill Pascrell (D-N.J.) to restore $510 million for Homeland Security grants for first responders.
Please understand. I have nothing but respect for firemen. But taking care of the needs of firemen is a local government issue and not an issue for the Federal government.
Will we ever learn or are our future pie makers doomed?