Deficit spending not evil GOP portrays - letter by Jay Moor

Reproduced here for fair use and discussion purposes. My comments in bold.

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Jay Moor has found his way to my blog once again, and as is typical for him, brings much heat and little light.

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Montana’s conservative legislators have more ways than a Ninja to throttle our government. The latest is a joint resolution asking for a convention to write a balanced budget amendment to the national Constitution (SJR4) — “for the good of the American people.” Twenty four other, mostly conservative, state legislatures have already submitted similar requests to Washington. When the total hits 34, a drafting convention is called.

Government borrowing (deficit spending) is trading on future income — not a bad thing, especially in bad times. (Actually, he means to say, "Not a bad thing, especially in bad times and good times." Because according to the Left, there is never a good time to reign in spending and get the government's fiscal house in order. Mr. Moor will later attempt to credit deficit spending for the recovery. We need to spend money when the economy is bad, but now the economy is supposedly recovered, we apparently still need to spend even more money, on infrastructure, expanding Medicaid, and increasing funding for our crumbling public schools. In other words, deficit spending is always good.) 

Government debt is the accumulation of annual deficits. SJR4 aims at stopping deficit spending and to limit the national debt, except in some undefined emergency.

If you are picturing Mom and Pop totting up their income (revenue), comparing that with their bills (expenditures) and then burning their credit cards, this is what the resolution’s sponsor wants you to imagine.(Except that Mom and Pop actually pay off their debt, little by little. Their mortgage is smaller every year. They pay their credit card balance and car loan. But the government doesn't. Government adds debt on top of debt. It hasn't reduced the national debt since 1957. There is no comparison to Mom and Pop.)  

It’s understandable and sounds like common sense. But, like Mom and Pop, we must have the ability to borrow money responsibly. (No one is opposing "responsibly" utilizing deficit spending. This isn't the conversation. $18 trillion of debt has nothing to do with being responsible. $18 trillion of debt isn't a result of responsible spending in order to benefit the economy. There is nothing responsible about it. That money went down a rat hole and we have nothing to show for it. It's about time someone stepped up and put a stop to the destruction of this country by irresponsible government spending.)

Deficit spending brought us out of the Great Depression (It did no such thing. The Great Depression is the longest on record, prolonged by wasteful spending, inept governance, and reliance on economic stimuli that did absolutely nothing.) 

when the federal government sold bonds to itself and to the American people to finance huge infrastructure projects that brought water, electricity, highways, schools, libraries and other public works to an economically moribund country. These public works, and a similarly funded (good) war, kick-started American industry and undoubtedly saved the world’s bacon. ("Undoubtedly?" I don't think so. There is no possible way that this is an example of government spending improving the results of an economic downturn. It is quite clear to any reasonable observer that government intervention into the economy during the 1930s prolonged the depression well past any reasonable limit.)

Government deficits managed to keep many American industries afloat during the recent Great Recession. (Um, no. Chrysler and GM both declared bankruptcy AFTER receiving bailouts. And the all these companies that took bailouts largely wasted the money. No, these bailouts simply padded the bank accounts of the rich and powerful. 

By the way, there is no evidence that would suggest that saving a company is beneficial, even assuming it were possible.)

This is Keynesian economics and its benefits are immeasurable. (If by "immeasurable" Mr. Moor means "can't be measured because there's nothing to measure," then he is quite correct. All the evidence suggests that that the more that government intervenes in the economy, the longer a downturn lasts. Our current downturn is now in its seventh year. Keynesian economics is clearly, inescapably, and totally a failure. There isn't a single documented example of it succeeding by any measure anywhere.) 

It ceases to work, however, when Congress lacks the fiscal discipline to decelerate spending when the crisis has passed. (Which contradicts most Leftist economists, who want to spend even more.) 

But, to take away the government’s ability to catch a stumbling economy and not offer a rational mechanism ("Rational?" Whaaa? On what planet does one have to live on to consider the failed recovery mechanisms offered by Keynesian economists to be successful by any measure?) 


in its place — maybe a running, 10-year budget smoothing formula — could be very bad for the American people. (Because all the previous legislation designed to lessen economic downturns has worked so well, we need even more?)

Jay Moor Bozeman