A long time ago in a galaxy far, far away

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By Linda Felaco

“When I was a kid, we had to walk 10 miles to school … barefoot … in 5 feet of snow … uphill … both ways!”

We all remember hearing stories like that from our grandparents when we were kids, telling us how much better we had things than they did. Kids can be lectured to. Adults, not so much. A recent post by the Charlestown Citizens Alliance’s new blogger, Michael Chambers, starts off:

When I was a teenager, my father stressed the importance of frugality in a way that still resonates in my daily life. He made sure I worked to pay my own tuition which left no extra finances for luxuries like a car, clothes fads, and other expenses teenage boys couldn’t do without. I didn’t miss driving around town and dating. I concentrated on what was important to me. I guess you could say that I caught up with my friends socially and economically by the time I finished college. As my father said, “What’s the rush?”

It’s nice to know Chambers’s dad taught him such important life lessons. Though in many families, frugality is a necessity, not a rhetorical device or a didactic tool.

But why is Chambers sending his childhood memoirs to the CCA? Apparently, the lesson he seeks to impart is that the government spends too much money. In essence, his comment is a kinder, gentler (and far more verbose) version of Town Council President Tom Gentz’s rant to Chariho Schools Superintendent Barry Ricci at the February town council meeting that Chariho’s budget is “too high.” As Chambers says:

I hearken back to those days when I think about how much the government spends and what they spend it for. It seems that Uncle Sam wants more and more money to spend on more and more programs that produce less and less results for more and more people. People who ask for tax hikes are asking for more spending, on more services, for more people, without regard to addressing real problems but only easing symptoms. Are the lessons I learned in my youth still valid today? I think so. However, circumstances have changed and spending is now out of control from the government level to personal finances. Our economy is in the red and so many families are in debt.

…

… [I]f the government insists on spending money like a drunken sailor, institute a civilian reconstruction corps to revitalize our transportation infrastructure, sewer systems, and urban renewal projects. I am a fan of Franklin D. Roosevelt and think that one of our most important natural resources is our population and they should be put to productive activities rather than being paid not to work. Actually our Federal, State, and local governments need to practice frugality and reduce their budgets.
Building a strong economic foundation takes time. We have to ask our government officials a few questions when tax increases are proposed: What do we get for it and what’s the rush?

It’s been a constant drumbeat among conservatives in this election season, this idea that governments should just tighten their belts, live within their means, and balance their budgets the way households do, or try to. There are, however, a couple of major flaws with this analogy.

First off, households spend their money on things they directly benefit from whereas governments spend money not for their own benefit but for the benefit of citizens and corporations. The things the government spends on are the backbone of our economy. No one would be able to earn money doing anything if we didn’t first of all have a functioning monetary system and banking system, reliable transportation, passable roads, schools to educate the workforce, and so on.

Second, spending by the federal government is not limited by actual cash flows and credit limits the way household spending is; the federal government can literally print money. To answer Chambers’s question, “What’s the rush?” he already answered it himself: “Our economy is in the red and so many families are in debt.” The rush is that people are suffering, and imposing an artificial austerity when the economy is weak only serves to further weaken the economy.

According to Chambers, “the government insists on spending money like a drunken sailor.” But where has the bulk of that money gone? Not to struggling families or small businesses—the true job creators in our economy—but to “too big to fail” banks that in a real free market economy most assuredly would have failed. And what have we gotten for our $16 trillion? A banking industry that has consolidated to the point that there are now only four banks in the entire country. So guess what happens when the next crisis comes along and there are only four banks and they’re all “too big to fail”?

And far from paying people not to work, a full nine-tenths of so-called entitlement benefits go to the elderly, disabled, and working families. The fraction of benefits that go to able-bodied, working-age people who aren’t working is either for Temporary Assistance to Needy Families, which in essence pays women to raise their children, or unemployment benefits, which pay people to look for work. If you’re not actively seeking a job, you can’t collect unemployment benefits. So who are all these people who are supposedly being paid not to work?

Chambers then contradicts his own frugality argument by proposing that the government engage in FDR-style big-government spending to get the economy out of the toilet—while simultaneously “practice[ing] frugality and reduc[ing] their budgets.”

Huh?

So which is it supposed to be? Do we spend our way out of the recession, or do we hunker down, keep our money stuffed in a mattress, and wait for someone else to start spending enough money to turn the economy around? I know what my answer is, though I am not at all clear on just what Chambers is proposing.