closing the gap to our dreams

Politicians are talking about our financial crisis in terms of the gap between what we spend and what we can afford. This is the wrong frame. They should be talking about the gap between what our dreams are and what we ask from our people.

The framing of an argument is critical. Consider, for example, the following analogy that I heard on some radio show from some inconsequential weekend political pundit:

“The debt problem in this country is a spending problem, not a revenue problem. Think about your own finances. If you’ve run up a big credit card debt, what do you do? Would it make sense for you to go to your employer and say, ‘Hey, I have all of this debt, will you please give me a raise so that I can pay it off?’ Of course you wouldn’t! That’s ridiculous. You would tighten your belt, just like American families across the country have done. You don’t ask for more income, you bring your spending down to what you can afford.”

When presented this way, the argument makes a lot of sense. It’s true, that it seems nonsensical to go to your employer and ask for a raise simply because you’ve accumulated debt. If you’re doing the same job, then why would you deserve more pay? On the other hand, if you are under-paid to begin with, then you should have asked for that raise a while ago… and it should have been because of what your work is worth, not because you need to pay off debt that you’ve accumulated.

So what (if anything) is wrong with this argument?

The problem is that it doesn’t look the reasons why a person (or a country) spends money.

When you look at a family’s budget (or an individual’s budget), the amount spent on different things is an empirical reflection of that family’s (or person’s) priorities. In many ways, it’s a better reflection of a person’s priorities than what they tell you: they might say that future security is more important than present comfort, but if they are spending more on a luxury car than they are putting into their retirement account, then you take their words with a grain of salt. No matter what a family says, you can tell what their functional priorities really are by looking at the amount they spend each month and each year on every category of life: housing, food, alcohol, college fund for the kids, retirement, and so on.

The same thing is true on a national scale. The story is more complicated, of course, because in a nation of millions of people not everyone has the same priorities. So the priorities reflect the “will of the nation” only in the sense that they reflect the will of the politicians who make decisions, the politicians’ innate talents and abilities to get things done, and the multiple forces (from voters to corporate donors) that influence them. And yet, that is not so different from a family, either. Children don’t drive the spending patterns of the family, but rather the parents make decisions based on their own beliefs about the children’s needs and wants, balanced by their own personal priorities and natural abilities. And as we all know, some parents are better parents than others.

If spending is a measure of priorities, then a budget amounts to a statement of values and vision. Whether you are a family or a nation, drawing up a spending budget is a statement of what you think is important and what kind of life you want to live. Whether you consciously view it as such or not, your budget is a reflection of your dreams: What do I value? What is most important? What can be sacrificed if I need to make sacrifices? A budget is a philosophical document. It can even be a moral document.

The budget of the United States, like the budget of a family, is more than just an economic thing. It is a statement about what we, as a country, value. It is a statement of the vision of what we want society to be like. It is a statement about our values and our priorities. The budget of the United States is the answer to the question: What do you want life in this country to be like, for our country as a whole?

Now let’s take a second look at that analogy to a family budget.

Suppose you have a dream for your family: you want your kids to go to college. Or you want to own your first home. Or you want to scrape together the capital for that lake-house for the summer, or that sailboat you always wanted since you were a kid. But you can’t afford it. What do you do? Do you cut back on spending? Do you pinch pennies? Or do you go to your boss and say, “What additional responsibilities can I take on, so that in a year or two I can get a promotion?” Or do you start going out and looking for a second job.

Do you think there is single family in the world who was able to pull an entire college tuition for their kids by “pinching pennies?” How many families out there do you know who could finance their house by “cutting back” on their groceries? It’s nonsense.

When you view the analogy this way, what makes sense—and what hundreds of thousands of American families across the continent have done—is to increase revenue. Find out how they can get that raise. Take that second job. Because they have a vision of the kind of life they want to live, and they will not sacrifice their dreams.

That’s the correct analogy to use, when talking about the United States budget. The deficit isn’t a gap between what we are spending and what we can afford: it is a gap between what we are asking for and the dreams that we have about life in America.

So when we, as Americans, say that we want our kids to go to college—ALL of our kids, not just the ones from families that can afford it—what do we do? Do we say, “Too bad, that dream is too big. It’s just not a priority that we can afford”? Or do we do what it takes to make it happen?

In our analogy, going to “the boss” and asking for that promotion is raising taxes on the individuals whose lives will not be harmed by paying it. Getting that “second job” is closing corporate tax loopholes. And in our analogy, just as the father promises the employer to do more work to earn the raise, the American government makes a promise to give back in return for taking more taxes. The American government will build a society with fewer slums, better roads, and a real opportunity for even the destitute to get an education so that they can become the next innovator, the next business man, the next millionaire. That’s American exceptionalism and the American dream: a country that makes it a priority (in both its rhetoric and its budget) to give everyone a chance to succeed.

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  1. duncanji says:

    >Superb!

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