Logic Of A Sort, But Reality Is Different

Robert Reich is a bright man, a scholar, and not a ideologue.

He speaks in the scholar's reasoned voice. In his most recent offering, he observes:

If John Maynard Keyenes taught us anything, it’s that a federal budget is not at all like a family budget. In fact, it’s precisely because families have to pull in their belts that the federal government has to let its belt out. When consumers and businesses aren’t buying much of anything, the government has to fill the gap. That’s the only way to get jobs and get the economy moving again. Once the economy is percolating, the government can pull back. By then, tax revenues will soar, and the long-term deficit will shrink.

He has a point.  It could work, mathematically.

Problem is, financial stuff isn't about math so much as it is about behavior.  We're blessedly not suffering at our house, and there is a list of toys OS would love to buy.  But the true price in future economic distress that would result would be way too high. Don't ask how this lesson was learned...

Congresses and Presidents, and most Governors and Legislatures, never learn.

When times are lean, they spend, because the economy's pump needs to be primed.

When times are good, they spend more, because times are good, and will be forever.  And there are votes to buy with taxpayer money. And if the tax revenue really isn't there in either scenario, then they'll just borrow against future tax revenue.  Easy-peasy.

But rain or shine, they spend more.

Economics is about behavior, which shapes the math.

And behavior is driven by ethics, or absence thereof.