Debt Ceiling

All the recent talk of budgets, debt ceilings, taxes, and entitlements has, frankly, left my head swirling. As a fiscal conservative I tend to automatically think that having a balanced budget is a good idea. I mean, how can it be good for our country to remain in debt. Yet, the country doesn't just remain in debt-- its debt continues to grow. I worry about foreign powers having ever increasing influence in our national interests because they own an ever increasing share of our debt. Most of all, though, I worry about how our economy can remain solvent when inflated currency flows at a growing rate. How can an issue that should be so cut and dry (I mean it's all dollars and cents, profit and loss, black and white) be so difficult for our leaders, and us, to agree on?

I will start by admitting that I am no economist. I never did take an economics class-- either micro or macro-- in college. So, I can only argue from (in my opinion) common sense and the bits of knowledge I gain from reading those who know this subject far better than I. I know this much. The two main schools of thought in the current economic debate stem from two economic schools of thought. Those who are sure we must spend our way to prosperity and continue allowing our federal government to operate on credit are, whether they realize it or not, following the economic ideas of John M. Keynes. Those, like me, who believe that continuing down the current path will be destructive in the long-run, and that a balanced-budget/minimal-tax approach is best for the long-term health of our economy stem from the philosophy of individuals such as Milton Friedman.

I recently read an article in Time magazine which stated quite plainly that the federal government cannot and should not operate on a balanced budget. This was quite a shock to me. I know there are those who think that a balanced budget is not feasible, but I had never heard anyone argue that we should not have one. The writer mentioned that those who compare running the federal budget to a family budget are naïve and ignorant. Now, I realize that the budget of the federal government is larger and more complicated than the budget of the average family, but it certainly seems that some basic principles would be shared by both. Namely that a budget that constantly pays out more than it takes in is not sustainable. This writer argued that the government needs to be able to spend more than it has so that other entities are able to borrow from it. Here is where my lack of economic knowledge comes in to play. I just don't understand why our government must be in the business of lending money to anyone. I am not saying that it cannot or should not be in the business of lending money. I perceive that there are likely times and situations where that type of transaction is useful and profitable. I just don't see why it is argued that the government MUST do this.

More and more I am beginning to see that some people believe (or at least operate as if they believe) that the economy is somehow a part of the federal government. They view the economy as a subsidiary of the government that is able to be directly controlled via the government. In fact, many believe that not only is this the case, but also that this is the way it should be.

Now it seems to me that the economy is an entity entirely separate from the government. The economy, very generally speaking, is the composite of transactions, money flow, investments, and wealth creation that are constantly occurring in an organization. Specifically, I am talking of the overall national economy of the country. Most of the activities mentioned above happen in the private sector. It is true that government regulations impact and even direct all of these activities, but the activities themselves happen apart from the government. Also, any portion of the overall economy that happens to be public (that is going on inside and including the government) is wholly dependent upon the private sector. What I mean by this is that the public sector derives all of its revenue from the private sector economy by taxing the transactions that take place there. The private sector can create wealth through value-added transactions and investments. The public sector cannot create wealth. It can only draw wealth out of the private sector and redistribute it.

With all of that being said, it seems that one way to boil all of this debt ceiling debate down to bite-sized chunks would be to say the following:

The debt ceiling needs to be raised because the public sector economy continues to grow.

The public sector economy continues to grow because we are unwilling to make true cuts in any area of the public economy.

The only source of income for the public economy is to draw from the private economy through taxation.

The more the public sector grows the more income it needs to operate and the more it must draw from the private sector.

The more money that is drawn from the private sector the less money is available for investment and wealth creation.

This line of argument brings me to a basic conclusion. If we continue to raise the debt ceiling then we continue down a path that limits and weakens the private sector economy.

So, should we raise the debt ceiling? As a general rule I would say no based upon what I have written above. Yet, I have to be honest and say that I do not know for certain that this is a situation that is not a special case. Is this a special exception in which we should raise the debt ceiling? I am not sure. I do know that continuing this kind of fiscal policy is not healthy.

Inside Jokes

Inside jokes are great. I am a big supporter of inside jokes. The prime directive of inside jokes, though, is that they are meant to be shared with the one or two people that are actually involved with the inside joke. Trying to include outsiders on the inside joke just doesn't work. I know it seems like a good idea in the moment, but, trust me, it is not really that good of an idea.

Let me explain what I mean. You happen to meet someone and realize that you share a mutual friend. Pleasantries are exchanged for a minute or two. The conversation ends and instead of simply saying goodbye and going about your business you feel the irresistible urge to have this person pass along something to your mutual friend regarding some inside joke. This is often done without thinking about it. At the time it occurs to you that this would be a nice gesture to affirm that you share a mutual friend. It usually goes something like, "Hey, next time you see Jeff tell him One-Eyed Bill says stay out of the cookie jar."

Whenever you ask someone to do this you make several assumptions. First of all you assume that this new acquaintance will see this mutual friend in the very near future. This is a fairly presumptuous assumption to make. Why will this person see your friend any sooner than you? They might not see them for a week, a moth, or longer.

Second, you assume that if and when they do run into this mutual friend that they will remember to pass along whatever it is you are telling them. This is an even greater assumption than the first. You are telling this person some half-insensible phrase and asking them to remember to pass it along. Oftentimes jokes, especially inside jokes, are dependent upon a certain play on words or timing of delivery. This person will likely not remember to say anything to the mutual friend. If they do happen to remember they will have no background knowledge to know how to deliver the message to have the proper effect.

Third, you make the almost impossible leap to surmise that this unintelligible comment that you want this person to pass along for you will sound cute or funny to them. Listen, this is where first impressions take an ugly turn. You may have held a fairly intelligent, perhaps charming, conversation with this newly-met person for a few minutes. Now, you end up saying something utterly foolish to them right before you walk away. Not only that, you realize by the look on the person's face that this inside joke is totally lost on them. (That is kind of the whole point of inside jokes, right? They are only humorous to those "in the know".) You then proceed to make a total shambles of the incident by trying to explain to them why this comment would be funny.

Everyone knows the unpardonable sin of humor: if you have to explain it to someone then it isn't funny.

The longer you go on retelling the account of how this inside joke the more imbecilic you paint yourself. It is excruciatingly painful to be on the receiving end of this. You are trying to be kind and cordial. You smile and nod and even pretend to know what this person is talking about as they go deeper and deeper into the retelling of this horridly unfunny joke. You feel sorry for the person while at the same time wishing you could click your heels and be magically transported out of there.

The reason I take the time to post my thoughts on this topic is because I recently witnessed just such an episode. I was sipping a refreshing iced coffee in one of my favorite caffeine stations. I grown man (who obviously also frequents the place) was leaving and strikes up a conversation with the young, teenage barista. Just as he was ready to walk out the door he says, "Next time you see Sandra tell her Pretty-Boy Window Cleaners stopped in." I looked up from my clear, plastic, 60% post-consumer cup that had collected a decent amount of condensation. I even squirmed in my seat for the guy because I could tell it wasn't going to be pretty. He immediately perceived that the girl had no idea what he was talking about-- especially since he didn't fit the description of "Pretty-Boy". He then had to try to explain this story of why Sandra would know what he was talking about and why it would be funny. It took him three attempts before the girl even seemed to get a grasp of what the whole story was. By that time the damage had already been done. "Pretty-Boy" even realized the spectacle he had made of himself and made an abrupt and awkward exit.

So, the moral of the story is this: keep inside jokes where they belong-- between participating parties.