Double Standards #1 – Debt

My parents stated the principle. “What’s sauce for the goose is sauce for the gander.’

George Carlin clarified the practice, “If it’s mine, it’s stuff. If it’s your, it’s shit.” As in, “Get your shit out of here! I need room for my stuff.”

We all have double standards. It’s part of the friction of living in groups. And we’re all pretty righteous about our own double standards. Things get petty and can be bothersome, but we usually, eventually, work things out, because we need to get through the day.

But when the government is paralyzed by double standards it goes beyond petty and bothersome.

In the United States, at both the state and national levels, over the last few decades a particular double standard has become more and more apparent: Business debt is good. Government debt is bad.

Here is the conservative line about the government, the budget and the national debt, as stated by any number of nationally prominent Republicans:

Government should not spend more than it takes in. Going into debt is bad. The government needs to eliminate the deficit and to pay off the national debt.

To do so, according to these same prominent Republicans and any number of conservative pundits, The government needs to cut expenditures, particularly “entitlement programs” such as Medicare and Social Security, but pretty much all social welfare programs.

And, of course, the government should not raise taxes, as raising taxes during times of financial slowdown will stifle the recovery.

OK. Let’s accept those arguments, shall we?

But then, I don’t see any reason why they should be limited to our government. If they are true, shouldn’t they apply to individuals and businesses too?

How about if these prominent Republican business executives follow their own advice?

Businesses should not spend more than they take in. Going into debt is bad. They need to eliminate their deficits. Therefore, businesses can buy only what they can afford to pay for with cash: no new buildings, no new machinery, no stock for sale, no purchases without the cash to pay for them.

And the other aspects of responsible economics: they should cut expenditures, particularly “entitlement programs” such as executive bonuses and golden parachutes, but pretty much all expenses beyond basic salaries and materials and processing expenses.

And, of course, they should not raise prices, as raising prices during times of financial slowdown will stifle the recovery.

How’s that for returning to sound economics and strengthening the economy?

Of course it eliminates lenders, and terminates most of the financial industry.

Well, as my parents said, “You can’t make an omelet…”

What do you think?

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