Friday, September 3, 2010

To Spend Or Not To Spend

Right now, that really is the question. The question. If you read the polls, read the articles, and read the comments, it is obvious that the American economy is the single leading question mark in the current political debate. The two sides can be nicely summed up with comments I saw today: "Any businessman knows you have to spend money to make money," and, "If I cut the budget at home, it works."
Neither side seems to understand that those are both oversimplified. You have to spend money to make money, but you also have to be careful where you spend your money and I've never worked for a company that didn't spend as much time cutting spending as it did spending. Cutting the budget is great and often necessary, but you do have to eat and pay the bills. You are liable to dislike the results if you decide the utilities bill is something you can cut from your budget.
That nicely sums up the problem with the ongoing debate. We'll ignore, for the moment, the fact that America is not a business (we'll come back to it though) and simply take the two sides for what they are. The first statement does still apply. While we do not often think of it the same way, you do still have to spend money at home in order to make money. You have to spend money on the gas to get to and from work (even if you work from home, there is still an effective travel expense in higher utilities or internet bills). You probably have to spend money on eating away from home. In most careers, you have to spend money on having the proper clothes and grooming. You may have to spend money on child care. Yes, even at home you have to spend money to make money.
However, you do not spend money on that fancy three-piece suit and claim that it is an expense to make money if you work at the local grocery store (maybe, if you hold a few specific positions at that store, but that is unlikely). You don't spend money on that shiny new game console and claim that is spending money to make money. You don't spend money on a brand new F150 and claim that is spending to make money when you work a minimum wage job six blocks down the street.
You have to spend money to make money, but you have to spend money the right way. In your home budget, when your spouse questions your extravagant spending, you don't get to dismiss those concerns by simply saying, "I'm spending money to make money." If you can't show how you're spending money to make money, the next bit of money you spend might be on a divorce lawyer.
Likewise, you can't just cut spending anywhere you want in order to save money. You have to eat. Even if you grow your own food, you will probably still have to spend money on basic supplies and tools. Unless you prefer the Stone Age (and can somehow get your family to play along), you probably do not have the choice of cutting the electric bill from the budget and, if you live in town, you won't be cutting the water bill either. There is a certain amount of spending that cannot be cut, though most of it can possibly be reduced (use less electricity, eat cheaper foods, etc.). You cannot, however, reduce expenses to zero and still be a household. Reducing expenses to zero results in homelessness, quite the opposite of a household.
A nation is not a business (told you we would get back to that). That is, a nation is not in the business of making a profit. A nation does not do things for the purpose of making money. A nation makes money for the purpose of paying required bills and providing required amenities, like a household. A nation is a very large household. Aside from removing the profit motive, however, we have seen that the rules don't change very much. They do change in one significant way, though. A nation does not get to say that it requires a certain tax because that tax would generate a certain revenue. That is the province of business. A nation must say that it needs this revenue to cover this expense. That is the province of a household. I have no sympathy when I see those budget reports that say the government is losing X amount of dollars by not charging X tax or fees. Too bad! It's my money, not yours. You are the employee, not the employer. Show me why you deserve that extra pay and then we can discuss it.
As long as our nation is spending extra money on unnecessary Playstations, F150's, and three-piece suits before paying the basic, required bills, though, I don't want to hear any crying about how it can't afford to pay the basics. There is a certain kind of person who answers every budget discussion with, "You want this but you don't want to pay for it," and then believes the discussion is over. No, I want this and don't want to pay for a Playstation and this. If this basic, necessary expense can be covered by eliminating the cost of the Playstation then why should I pay more before the cost of the Playstation is eliminated? Don't tell me you need more money while you're still spending to play before you've paid the bills. I have to pay the bills first and the government should be no different.
You have to spend money to make money, but you have to spend the right money in the right way. Right now our government spends so much money on extra bells and whistles that there is absolutely no point in even discussing raising taxes on anything until those bells and whistles have been addressed. We on different sides of the debate will no doubt disagree on what constitutes an extra bell and whistle, and we should be discussing that, but most of us agree that there are extra bells and whistles, which are costing us a fortune. Yes, we need to spend and cut but, like any household, we need to look at where we can cut before we start looking at where else we can spend.

No comments:

Post a Comment