Balance Our Federal Budget
in One-easy Step
. .
But Please Do Not Try This
By Bob Komives
The Tea Party and the Obama party can force a balanced federal budget with one step. (Well, it would take two quick votes and one signature.) They must simply decree that the federal government of U.S. America will abandon the dollar and do all its business with the Euro. Or, if that zone won't have us, with the Yen then--or, the Pound Sterling, or the Norwegian Krone. If we abandon our sovereign currency we have no choice but balance our national budget! Ask Greece; ask Ireland; ask Spain; ask California.
Yes, California, one of the biggest economies in the world, it must come begging for help to the dollar-zone (the states united in America) when it suffers a devastating earthquake or wild fire. Why?
Simply because the minting and printing of the CaliforYen is prohibited by the state's membership in the dollar-zone federation. California cannot do as Spain, Greece, and Ireland used to do: finance its own recovery with its own currency and let the world markets decide if that sovereign currency should then rise or fall in value. Don't feel sorry for California; feel sorry for booming North Dakota. If it weren't subservient to the dollar, if it had launched NordBucks a decade or so ago, the state's NordBuck would likely be leaving the dollar in its monetary dust.
Am I serious. Well, I do dislike the idea. I don't want to abandon the dollar as long as there is hope for us as a nation. But, yes, I am serious in this sense: if you have in mind that the federal government should balance its budget the way you and I balance our checkbooks, or the way our towns, cities, states, and factories balance their budgets, then we must abandon the sovereign dollar. All other options, the ones on the table, are at best fiction, at worst pontificating.
Money is one of the most fascinating and magical inventions of humankind. If you are looking for a parallel to sovereign currency budgeting in your home and family budget, don't look at your check book and bank balance. Your check book and bank balance better parallel the accounting of California, Omaha, General Electric, and budget-by-Euro Ireland. Look instead at the way you and your family use your time, focus your effort, hone your skills, manage your other non-money resources. You do budget these. You literally "spend" your time. You recognize that the way you spend your time and other non-monetary resources has much to say about your family's welfare and its future. We can call this your family's internal budget. Your family does not have to earn nor buy these resources from the large, outside, market economy. True, some of them you once earned or purchased in the outside, but long since they are yours.
Every family has an internal, non-dollar budget; some families handle these budgets better than others. Also, some families are just luckier than others--an oil well gushes on this farm while a chronic disease strikes in that house. Yet, we intuitively recognize that our internal budgets can amplify the benefits of our good fortune and dampen effects of our misfortune.
There are limits to what a family can do with its non-dollar assets--there is only so much time in a day, there are only so many projects that fit into one garage. However, while "balanced" is not a terrible term to describe good internal budgeting; "wise" is far better. It is wisdom that we must muster to figure out how best to allocate our non-money resources. For our allocation is far less a matter of "what we can afford" than a question of "what is a wise." Is it wise this evening to spend an hour to help your child with her homework? This is not an hour of revenue; it is not an hour that you earned nor bought from the outside world. It is your free hour to invest as you wish. You won't fall into some known, calculable deficit, whatever your decision. You must judge whether it is wise for you and your daughter to invest this time together this evening. Here, then, is the true parallel between federal budgeting and personal finance. The miracle of money (forgive my hyperbole) is that it provides an efficient, crafty way for a nation to invest internally as a family budgets internally. The size and character of both budgets is bounded by wisdom, not revenue.
Wisdom, of course, is hard to come by. Some well-intentioned and well-planned investments prove unwise. However, sovereign currency has a built in way to handle this problem. Everybody who has one dollar to spend will feel a bit of a pinch as its purchasing power goes down. Those with two dollars will feel the pinch doubly. That's about as equitable an outcome as we can hope for--more equitable and far simpler than the daunting choices faced by California and Spain. No matter how these governments decide to spread the pain of their imbalances among their citizens, some will feel too much, some too little.
You may have trouble seeing the parallel between federal budgeting and a family's internal budgeting because we have a national fiscal apparatus that seems to have all the right parts for non-internal, money accounting: income, debt, expenditures. These seem to be the same parts that mesh tightly and enable you to balance your checkbook and enable California, Ireland, and Omaha to put hard and fast figures around what they can afford to do next year. These federal fiscal parts do indeed mimic the parts that enable a family to decide what it can do on the outside, the money-side, next year. Yet, for a caretaker of a sovereign currency, these parts dance with and around each other. I like to say they merely dance, you might prefer to say they are just meshing around. Whatever, history shows that the results can be beautiful.
I know nobody who tries to put hard and fast figures around how much effort a family can expend in academic study, repairing leaky faucets, reducing weeds in the yard. This too is a dance that will make hard and fast budget figures look silly. Let's call the silliness, bean counting. Despite the silliness, my small-sample list of possible items in a family's internal budget includes investments quite worthy of consideration. It is equally silly to put hard and fast figures around how many dollars U.S. America can bring into existence and then spend on repairing our bridges, upgrading the skills of our flight controllers, fighting an epidemic, treating the sick, and supporting scientific research--important investments for our nation to consider.
What about good and evil? It seems nobody can debate the federal budget without plenty of good-and-evil talk. Take me for example. I consider it deeply immoral for politicians to reduce taxes on the rich so they have an argument to reduce benefits for the poor. I feel embarrassed that such selfishness and hypocrisy thrive in my country. Yet, my moral outrage and the umbrage of those I accuse obscure the problem. The more dust we kick at each other the more we close our eyes to anything but bean counting. Bean counting gives us numbers with which we can better insult. I'm not going to give up my view that there are a lot of immoral hypocrites involved in this debate. However, here I want to open eyes rather than kick dust into them. It is past time for a majority of us to see we need to revert our attention toward wise national investment--toward efforts that are even better than historical investments that have defied bean-counting deficits and enabled our nation to provide most of its citizens with security, comfort, and welfare.
In sum. To any and all who believe themselves to be serious advocates of lowering the balance-boom on the federal budget, I say get truly serious; advocate that we abandon the dollar. But, that's silly. I'd far rather we all advocate wisdom.
.
.
Yes, California, one of the biggest economies in the world, it must come begging for help to the dollar-zone (the states united in America) when it suffers a devastating earthquake or wild fire. Why?
Simply because the minting and printing of the CaliforYen is prohibited by the state's membership in the dollar-zone federation. California cannot do as Spain, Greece, and Ireland used to do: finance its own recovery with its own currency and let the world markets decide if that sovereign currency should then rise or fall in value. Don't feel sorry for California; feel sorry for booming North Dakota. If it weren't subservient to the dollar, if it had launched NordBucks a decade or so ago, the state's NordBuck would likely be leaving the dollar in its monetary dust.
Am I serious. Well, I do dislike the idea. I don't want to abandon the dollar as long as there is hope for us as a nation. But, yes, I am serious in this sense: if you have in mind that the federal government should balance its budget the way you and I balance our checkbooks, or the way our towns, cities, states, and factories balance their budgets, then we must abandon the sovereign dollar. All other options, the ones on the table, are at best fiction, at worst pontificating.
Money is one of the most fascinating and magical inventions of humankind. If you are looking for a parallel to sovereign currency budgeting in your home and family budget, don't look at your check book and bank balance. Your check book and bank balance better parallel the accounting of California, Omaha, General Electric, and budget-by-Euro Ireland. Look instead at the way you and your family use your time, focus your effort, hone your skills, manage your other non-money resources. You do budget these. You literally "spend" your time. You recognize that the way you spend your time and other non-monetary resources has much to say about your family's welfare and its future. We can call this your family's internal budget. Your family does not have to earn nor buy these resources from the large, outside, market economy. True, some of them you once earned or purchased in the outside, but long since they are yours.
Every family has an internal, non-dollar budget; some families handle these budgets better than others. Also, some families are just luckier than others--an oil well gushes on this farm while a chronic disease strikes in that house. Yet, we intuitively recognize that our internal budgets can amplify the benefits of our good fortune and dampen effects of our misfortune.
There are limits to what a family can do with its non-dollar assets--there is only so much time in a day, there are only so many projects that fit into one garage. However, while "balanced" is not a terrible term to describe good internal budgeting; "wise" is far better. It is wisdom that we must muster to figure out how best to allocate our non-money resources. For our allocation is far less a matter of "what we can afford" than a question of "what is a wise." Is it wise this evening to spend an hour to help your child with her homework? This is not an hour of revenue; it is not an hour that you earned nor bought from the outside world. It is your free hour to invest as you wish. You won't fall into some known, calculable deficit, whatever your decision. You must judge whether it is wise for you and your daughter to invest this time together this evening. Here, then, is the true parallel between federal budgeting and personal finance. The miracle of money (forgive my hyperbole) is that it provides an efficient, crafty way for a nation to invest internally as a family budgets internally. The size and character of both budgets is bounded by wisdom, not revenue.
Wisdom, of course, is hard to come by. Some well-intentioned and well-planned investments prove unwise. However, sovereign currency has a built in way to handle this problem. Everybody who has one dollar to spend will feel a bit of a pinch as its purchasing power goes down. Those with two dollars will feel the pinch doubly. That's about as equitable an outcome as we can hope for--more equitable and far simpler than the daunting choices faced by California and Spain. No matter how these governments decide to spread the pain of their imbalances among their citizens, some will feel too much, some too little.
The built-in capacity of sovereign currency to disperse pain and benefit from its nation's investments is also the best built-in, knock-on-forehead call for wisdom that we can hope for.
You may have trouble seeing the parallel between federal budgeting and a family's internal budgeting because we have a national fiscal apparatus that seems to have all the right parts for non-internal, money accounting: income, debt, expenditures. These seem to be the same parts that mesh tightly and enable you to balance your checkbook and enable California, Ireland, and Omaha to put hard and fast figures around what they can afford to do next year. These federal fiscal parts do indeed mimic the parts that enable a family to decide what it can do on the outside, the money-side, next year. Yet, for a caretaker of a sovereign currency, these parts dance with and around each other. I like to say they merely dance, you might prefer to say they are just meshing around. Whatever, history shows that the results can be beautiful.
I know nobody who tries to put hard and fast figures around how much effort a family can expend in academic study, repairing leaky faucets, reducing weeds in the yard. This too is a dance that will make hard and fast budget figures look silly. Let's call the silliness, bean counting. Despite the silliness, my small-sample list of possible items in a family's internal budget includes investments quite worthy of consideration. It is equally silly to put hard and fast figures around how many dollars U.S. America can bring into existence and then spend on repairing our bridges, upgrading the skills of our flight controllers, fighting an epidemic, treating the sick, and supporting scientific research--important investments for our nation to consider.
Most of us, perhaps all of us, have our favorite examples of when the United States "broke the bank" in order to invest far beyond its apparent means in something that either made the great nation greater or saved it from disaster. Ponder your examples long enough to see that they demonstrate what a wise nation does with its sovereign currency.
What about good and evil? It seems nobody can debate the federal budget without plenty of good-and-evil talk. Take me for example. I consider it deeply immoral for politicians to reduce taxes on the rich so they have an argument to reduce benefits for the poor. I feel embarrassed that such selfishness and hypocrisy thrive in my country. Yet, my moral outrage and the umbrage of those I accuse obscure the problem. The more dust we kick at each other the more we close our eyes to anything but bean counting. Bean counting gives us numbers with which we can better insult. I'm not going to give up my view that there are a lot of immoral hypocrites involved in this debate. However, here I want to open eyes rather than kick dust into them. It is past time for a majority of us to see we need to revert our attention toward wise national investment--toward efforts that are even better than historical investments that have defied bean-counting deficits and enabled our nation to provide most of its citizens with security, comfort, and welfare.
In sum. To any and all who believe themselves to be serious advocates of lowering the balance-boom on the federal budget, I say get truly serious; advocate that we abandon the dollar. But, that's silly. I'd far rather we all advocate wisdom.
.
.
No comments:
Post a Comment