July 19, 1990

The Spending Game

A billion here, a billion there-- pretty soon it adds up to real money.

Senator Everett Dirkson (1896--1969)

When I was in high school, there was a basic difference in the philosophies of the Democrats and Republicans. The Democrats favored government spending for public works and social programs. To finance these programs, they thought that taxation was necessary. The Republicans claimed to be opposed to both government spending and taxes.

The Democrats appealed mostly to the poor and many middle class voters while the Republicans appealed mostly to the rich and many middle class voters. During the great depression, there were lots more poor people, so the Democrats ended up in power. The Republicans are likely to remain in the saddle until a lot more voters get poor again.

With the current high cost of TV commercials and winning an election, both parties now need the backing of people with lots of money. The days when you could finance a campaign on small individual contributions are gone.

Our government has changed. The members of both parties are now irrevocably committed to continuous and high government spending. A few legislators believe that the spending should be financed by higher taxes. In the absence of higher taxes, which the voters consistently reject, the vast majority of the members of both parties seem to favor increased debt. Actually cutting spending is unthinkable. For one thing, the economy might collapse. Since no one can be elected who favors both high government spending AND increased taxes, we can expect nothing to change until the economy hits the proverbial fan.

Nowadays, the main difference between the two parties is that the Republicans favor high military spending while the Democrats favor high spending for social programs. The Republicans favor taxing the middle class, while the Democrats favor taxing the middle class. The Democrats favor taxing rich Republicans while the Republicans do not.

Each party claims that their particular bias makes prosperity. The Republicans claim that military spending keeps the country secure and creates jobs. The Democrats claim that placing more money in the hands of the poor and middle classes results in more consumption, greater demand and, consequently, more jobs. Both are right. It really doesn't matter much what you spend the money for, as long as you spend. When spending slows down, we have a recession. When spending stops, we have a depression.

In California, many of the jobs and much of our prosperity is a function of military spending. Consequently, even the so-called "liberals" vote for high military spending, when California is involved. The Pentagon makes sure that California is always involved; as well as the other 49 states. When push comes to shove, the military threatens to close military bases in the districts of congressmen who are tending to vote for decreased military spending. And it works like a charm. Consequently, both liberals and conservatives support military spending.

Reagan said that he was in favor of a balanced budget amendment to the constitution, but he didn't push it. Instead, we got the Gramm-Rudman Balanced Budget Act (also called the Budget Balancing Act), which is supposed to keep the annual deficit within bounds. Does it do it? Not being an accountant, I haven't the faintest idea. Being an unregenerate cynic, I doubt it.

If the national debt gets to be so big that it becomes impossible to pay the interest on it, there is only one way out. That way out is for the government to go communist and simply cancel the debt, leaving the lenders holding the bag. So far, the powers-that-be have only been concerned about that happening in Mexico; not here.

Am I suggesting that BOTH the Democrats and Republicans are leading the country down the road to communism? Yes, but it would just be for a few years to get rid of the debt. Then back to business as usual until the burden of debt again becomes unbearable.

Once lenders have been stuck, won't they be reluctant to lend money to the government? I doubt it. Don't people continue to play the lottery, roulette, poker and the stock market? With clever devices like Gramm-Rudman, the time that it takes for the debt to again become unbearable might take another 40 or 50 years.

No need to feel bad about it. Most of the countries in the world are heavily in debt. As Tom Lehrer said, "we will all go together when we go!"

So, don't worry; be happy!!

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