I read a comment recently on the story about the governor's proposed budget where he wants to cut 40% across the board. It said something to the effect that when the economy is down the government should tighten it’s belt because that’s what happens when a household budget shrinks.
*sigh*
I really wish more people took economics classes or even an anthropology class. 100 level would be fine.
When the economy is down the proper thing for a government to do is spend. The private sector has laid off people, not as many people are buying stuff, so more people are being laid off. One of the things the New Deal did was public works projects. The Golden Gate Bridge was one of those projects. It put people to work. They, in turn, spent money which boosted the private sector. Then when those projects were complete the private sector was boosted enough to have jobs for them.
“But isn’t the government spending money it doesn’t have?”, you ask. Well yes and no. One of the government's functions is to print money. If they need more, they can print more. Of course, they can’t do this forever, hyperinflation is bad. However, the system we have in place for better or worse is we have a central bank that handles all this for us. So the government borrows to cover the deficit spending. This has a side effect of altering the supply of money in the lending market, which changes the interest rates which makes banks want to lend again. Then that allows the private sector to expand some more. Economy grows. What’s then supposed to happen, is, after the recession is over, the government stops deficit spending.
Another thing, high marginal tax rates on the upper tiers are a good thing. If nothing else, companies invest back into the company more (usually in the form of higher pay for the workers and pensions) since only profit is taxed. There’s also an inverse correlation between high taxes and government corruption. People who pay a lot in taxes tend to not like it when their representatives rob the store, go figure. Taxes are an investment in the infrastructure governments provide, everyone should pay their fair share.
As far as the anthropology end of things, governments arose to take care of the people. That’s it. There are some people that decry what they call the “nanny state”. That people seem to want the government to take care of them. Yup. That’s what it’s for. Armys protect a society from outside threats. Property records keep track of who owns what. Regulations on businesses keep the water and the air clean as well as making sure the products we buy are safe to use. Roads to get us and our products from place to place. Public lands need management. All of this costs money, tax money.
And no one needs a billion dollars, let alone multiples of that. I know the human brain has a hard time understanding how much a billion is. It helps if you think of it as one thousand million. 1,000 x 1,000,000 = 1,000,000,000 (Sorry, i didn’t warn you there would be math.) It would take multiple generations to spend that much, even if it didn’t accrue interest.
