Simple Arithmatic That Tea Partys Miss

Last time I talked about what I consider to be the absurdity of the Tea Party position—however mainstream American it may be. Now let’s talk about some valid concerns Americans do have about our present governmental activities.
Last evening I stopped to chat with a neighbor who has run his own construction business for several decades, does good enough work to be prospering in recession, and is much too busy to take time off for tea parties of any kind.
He just evaluates the fiscal policies in Washington from the standpoint of the simple arithmetic that has to govern his own business decisions. If you earn $1,000 a week and you continually spend twelve or thirteen hundred, at some point something bad is going to happen.
Very basic—a well educated third grader could probably walk you through it. Neither he nor I are refuting Keynes—but Keynes in his wildest imagination probably didn’t contemplate a level of governmental spending in GOOD TIMES and BAD that led to consistent and often huge deficits on a regular basis.
We haven’t just spent our way out of recessions and depressions. If bad years were the only time we had run deficits, our national debt would be infinitely smaller. Keynes’s idea was to ramp up government spending when everybody else was flat—and, hopefully, to PAY IT OFF IN GOOD YEARS. Like a nearby power plant works in Michigan.
At night when demand for electricity is low, it expends energy pumping Lake Michigan water into a huge reservoir. When day comes and homes and factories turn on the juice, the water flows back out, turns the turbines and generates power.
This is the backup plant that is used to restart electrical plants all over Michigan in cases of major power failure. It’s precisely the sort of thing Keynes had in mind in government finances. Unfortunately the United States has been running the water out without pumping much in for decades.
My neighbor’s concern is that at some point the fiscal reservoir is likely to run dry—even if he doesn’t say it in those terms.
He’s right. The American lust for a free lunch—first noted when we refused to pay our fair share of defense taxes during and after the wars with France—is eventually going to catch up with us. Since the 1960s (the game began long before Reagan) we’ve been cutting taxes (water being pumped into the reservoir) and piling on new programs, Medicaid, college aid and grants, Medicare, Social Security entitlements, enhanced welfare and fighting wars (water flowing out), without paying for it.
Had we been regularly replenishing the reservoir, we might well have afforded a few trillion here, a few trillion there to bail out our economy in 2008. (Then again, if we had always been the kind of people willing to PAY for government services, we might never have gotten into the mess we were in a year ago.)
At some point, as Greece found out, the reservoir really will run dry. Then there will be no more juice generated—and nothing with which to restart the plant. But the problem isn’t a “socialist Obama” who is the first president ever to run us into debt.
The problem is us. WE stood at Bunker Hill or at Boston Harbor and shouted that we wouldn’t pay for the services we demanded from government. WE voted for what George H.W. Bush called “voodoo economics” back in 1980 when we elected Reagan.
WE cheered as Lyndon Johnson slashed taxes, created vast new programs and launched a very expensive war all at once. WE loved George W. Bush as he cut taxes and launched his world wide war on terror.
Someday we definitely are going to get a notice: “Your credit limit has been exceeded”. That’s when the tea party people will really have something to be mad about.