Despite my inherent prickliness, I have Facebook friends. I know, I know. But I actually do.
Several of my Facebook buddies are young conservatives, mostly friends of my kids, and they are spectacularly uninformed while maintaining very strong opinions. Daily posts decry the excesses of the Obama administration: every new dollar spent is an outrage.
Every single one of these neophytes has the same problem: they believe that our national economy, and in fact the world’s macroeconomy, works just like their own personal finances. This is a budgeting problem, according to these naive Limbaugh/Beck acolytes. Tighten the belt, spend less. What works at home will work everywhere.
If only.
Macroeconomics, my young friends, is to microeconomics as particle physics is to middle-school frog dissection. Macroeconomics is complex enough that they give out Nobel Prizes for exceptional expertise in the discipline, it is nuanced enough to have schools of thought, and it is above all nothing at all like home budgeting.
Our current problem is not a scarcity problem: it is not a national version of being laid off and needing to watch our expenses. Rather, it is a demand problem: we aren’t spending enough in the aggregate. Spending, in this macroeconomy, is a very, very good thing.
I understand. You don’t get it. (And believe me: I understand that your mentors on schlock radio don’t get it. Wow, they really don’t.) It’s counterintuitive.
Just try to remember: if it was as easy as a home budget, they wouldn’t give out prestigious medals in Norway for it.