The dumbest (and most harmful) analogy in politics
April 18, 2012 6 Comments
Well, maybe not the dumbest, but its gotta be up there. Yglesias today nicely explains why the analogy of the government budget to a household budget is simply non-sensical. And earlier today I listened to the New Yorker’s politics podcast in which Ryan Lizza and James Suriowiecki pointed out just how politically stupid it was for Obama to publicly buy into this analogy. Anyway, here’s Yglesias:
Back to the federal budget. When the US government borrows money and builds an aircraft carrier, it hasn’t just taken on debt it’s acquired an aircraft carrier. And when the US government borrows money and pays a teacher to teach a kid to read, American society gains a literate citizen.
So there are two relevant questions to ask yourself about any kind of expenditure, neither of which is about debt. One is how valuable is a given purchase (of a car or an aircraft carrier or a company) and the second is what’s the most affordable way to raise the funds. Under ordinary circumstances, it makes a lot of sense for the government to finance its expenditures through taxes. But under the unusual conditions of a depressed economy and negative real interest rates on government debt, it’s much more reasonable to finance purchases through borrowing. A separate issue is what kinds of things it makes sense to purchase. Obviously one important philosophical difference between Mitt Romney and Barack Obama is that Obama thinks lots of things the federal government buys (health care and food for the needy, schools, transportation infrastructure, public health and safety regulators) are valuable whereas Romney thinks that only its military purchases and health care for the currently elderly are valuable.
If a household needs more revenue one of its members can at least try and get more work. The government clearly needs more revenue yet one politically party is theologically opposed to government doing the one thing it can most easily do to raise revenue– raise taxes. If we’re going to go with the household analogy it’s like the troglodyte husband saying the wife cannot work no matter what and then complaining when there’s not money for the new HD Television.