Sunday, March 1, 2009
The latest government budget proposal from the executive branch is out, and it’s a masterpiece of fiscal irresponsibility. Clocking in at $3.6 trillion, it sports a deficit that is 12.5% of the projected GDP for FY2009 (fiscal year). It also displays no sacrifice in any quarter, as everything is funded, and then some. Sure, the priorities shifted between administrations, but a lack of spending limits did not.
"But this is an emergency!" we are told, implying that it’s not the right time to be pulling in our spending horns. This argument rests on the assumption that our problems can be fixed through additional deficit spending. However, the facts suggest that we are suffering from too much debt and too much deficit spending, not the opposite.
It’s vital that we truly diagnose our problems correctly, or we run the risk of applying "solutions" that are actually the medical equivalent of giving poison to a poisoning victim. In this case, I strongly disagree with the "solution" of throwing borrowed money at every problem that arises. The problem is not rooted in "too little money," but in mal-investment and a lack of savings, both of which are being compounded by these "solutions."
Worse, solutions only apply when we face a problem – not when we face a predicament. Predicaments do not have "solutions," they only have outcomes. Teetering near the edge of a cliff is a problem with a solution. Finding yourself in the air after falling off a cliff is a predicament with a range of possible outcomes, but no "solutions." Problems are generally reversible. Predicaments are not.
So are we facing a problem with solutions (e.g., TARP funding, bailout money, stimulus and deficit spending, etc), or a predicament with a range of less-than-hoped-for outcomes?
by cmartenson 
