Dueling Twins

Surplus

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The 'Dueling Twins'

There are two kinds of statistics, the kind you look up, and the kind you make up.
 
Rex Stout

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Promises Promises - Reality Bites !

Counterpoint:

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Government Is Not A Business
 
James Hall - From the Left

Sartre is right when he claims there is no real government surplus, but wrong when he compares government to a business. Government shares some features with business, and is sometimes likened to a service industry, but fundamentally it isn't a business at all.  And trying to run a government as though it were a business is a recipe for trouble, if not disaster.

I agree with Sartre that the idea of a government surplus is political flimflam, a way for politicians to congratulate themselves for having more tax money than they have current tax expenses.  But the extra money being taken in right now is in Social Security payroll taxes, and that's money that will be needed to pay for future Social Security checks.  The Gore plan, which would have used this money to buy bonds and pay down the national debt, was a good one and would still work.  The "surplus" would pay off part of the national debt, which would lower pressure on interest rates and make it easier for business to borrow, improving the economy.  As bonds the "surplus" would increase in value and delay the time when aging Baby Boomers push the Social Security surplus into a deficit.

Unfortunately the events of September 11 are going to eat into this surplus.  Instead of buying bonds and reducing the national debt, Congress will use the money for government spending and therefore assume an obligation to pay it back out of general tax revenues at a future date, adding to the debt or at best decreasing it at a slower pace.  There's little that can be done about this--we need this spending to fight the war in Afghanistan, rebuild the Pentagon and New York City, and pay for the increased security that a terrorist war requires of us.

And that's one of the things that makes government different from business.  Business is about supplying products, but what product does government create?  What service?  One can't categorize the national defense, the maintenance of a national infrastructure or the defense of civil liberties as either a product or service.  Individual liberty or public order is not subject to the constraints of profit or loss, nor should they be.  There is no price tag on the flag, no financial statement in the Constitution and no stockholders, board of directors, or CEOs placing a dollar value on the nation.  Forced mergers or hostile takeovers are not possible without bloodshed.

Yes, governments are a part of the economy and are run on economies of scale.  Armaments and armed forces cost money, as do courts of law, law enforcement, regulatory agencies, etc.  If agencies can do their jobs faster, better, and cheaper, that's all to the good.  Recent efforts to run government more like a business--like Al Gore's "Reinventing Government" program--which cut over 100,000 federal jobs and saved millions of dollars during the Clinton administration, are welcome.

But not all of them make sense.  One of the reasons for civil service, for example, is to make government employees responsible to the people they serve and less beholden to their political bosses/superiors.  Many of the checks and balances that we our government limited are expensive, too.  It costs money to provide legal counsel to defendants charged by the state who cannot pay their own way.  It costs even more money to defend convicted felons from the death penalty, the most severe sanction a government can levy. (It would be far cheaper to punish them with a life sentence and warehouse the felon for forty years.)  But this is money spent by the government to protect the innocent and the liberty of those who find themselves opposed to the government.

As Sartre notes, companies operate with a motive towards their own profit.  But the government's profit lies not in the money it collects--that's decided by its own citizens through their elected representatives--but by the welfare of those citizens.  Consider the words, "We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America."

That's a very different Mission Statement than one you'll hear from any corporation or privately owned business.  Certainly no organization whose business is nation-building should expect to make a profit, or even break even.  Most developed countries operate from a position of debt, not profit, something that would be intolerable to a corporate stockholder.  It makes them terrible businesses, but great governments, whose citizens wouldn't have it any other way.

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Final Word:

Sartre's putting words in my mouth once again.  Go back, gentle reader, to my Counterpoint and you will see what I actually said--that government can profit from the use of sound business practices, as it has done with Gore's "Reinventing Government," in adopting economies of scale and improvements in efficiency.  That aside however, the real point is that a government is a very different organization from a business, and we don't accurately judge a government using a business model.  If we start our own business, we do it to make a living, make money, to create something that people will buy.  None of these reasons are anything like the reasons the founding fathers relied on to establish our Constitution.

Sartre would have us believe that the true calling of capitalism is go give us what we want, not what makes a profit.  Why then, when light bulbs can be made that burn for decades, can I only buy ones that last for weeks?  Why can't I a buy a car that lasts longer than a decade and gets more than 30 m.p.g. when prototypes last three times as long with five times the gas mileage exist?  Why does the cost of prescription drugs drop precipitously over the border of the US, whether one goes north or south? Why does the cost of Coke and a hot-dog rise through the roof when I go to Disney World or Universal?  Is it because, as Sartre says, I want all these things to be this way?  That these businesses are meeting my need to change light bulbs and eat expensive hot-dogs?

No, Sartre, business is about making a profit, and it is with profit alone that business is concerned.  How do we judge a company's viability in the stockmarket--by the wonderful products it creates or by its profit margin?  And don't forget that where there is absolutely no consumer desire for a product or service, business will create that desire through advertising.  Remember Pet Rocks, Sartre?  How about Chia Pets?  Because it's all about profit, business will convince us that our bodies stink, that we have bad breath, are losing our hair, our teeth, our eyesight, need more insurance, and we must buy their products to compensate for all these commercially created inadequacies that our ancestors took for granted.

Contrast the profit-making motives of companies and corporations with the motives the founding fathers cited in creating the United States: 1) to form a "more perfect" union;  2) establish justice; 3) insure domestic tranquility; 4) provide for the common defense, 6) promote the general welfare; 7) secure liberty for current and future citizens.  These are fundamentally different motives accomplished in fundamentally different ways from the business model.  We don't want a government that makes a profit, we want one that establishes order, ensures justice, and secures our liberty.

In the final analysis, one wonders how anyone can liken government to a business.  Does our president have the powers of a CEO, or are they unimaginably greater?  (Think of the implications of being the Commander In Chief, or the power to issue executive orders.)  Is our legislature anything like a board of directors?  Our judicial system like a corporate legal department?  Is consumerism equivalent to citizenship?  The scope of government, its power and responsibility are so much greater that only the unimaginative, pedestrian shopkeeper can liken his little economy to the nation's political economy.  We can pity him, but we just can't believe him.

James Hall, From the Left

Point:

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Surplus Real Or Imaginary?

When government policy is based upon projections of future income from tax revenue, the consequences of reality will always disrupt the best of plans. With the downturn of the economy over that last several months, and the tragic events of 911, we have entered into a new dimension of fiscal retraction. Should anyone be surprised that promises of 'milk and honey' from politicians always come up short? The disease of excess expectations is non partisan. It consumes all parties and in most cases, afflicts every ideology. The reason is simple! Politicians need to appeal to the public for support.

The flaw within this system of deceit is the fear that telling the truth will get you a one way ticket out of the Beltway. The recent business example of Jacques Nasser at Ford haunts the politician. Being held accountable for performance is a standard that few have ever faced. If CEO's can be canned for blowing a twenty billion treasure chest, why can't a 'career public servant' be placed on the carpet?

In business, profit speaks very loud. Jack Welch is hailed as a conquering Caesar for his growth performance. In politics there is never any glory for using the knife, in the same way as the GE genius. Why? Are we so confused as a people to think that growing government creates better cost effective services for the public? Only the delusions of habitual denial allow for the dismissal of this fact. Adopting the posture that the role of government is different from business, avoids the correlation between what you get for the cost of what you pay.

Government thrives upon the allusion that people will dismiss accountability. When the alphabet soup agencies do their scoring for future budget requirements, they pay little attention as to how those needs will be funded. The bean counters that spend their time on projections are modeling systems to refine guesses. Legislatures are preoccupied with committee functions and media exposure, giving little thought on the details of these forecasts. And no one has any idea if the money is really going to be collected.

What a way to run a company! Oh, yes; you are right, this is not a business, it is the government. Normal rules don't apply. It is, make up new codes or change the wording of existing laws, at the first sign of bad news. Is this the best method that can be designed to meet the real needs of the country?

It borders on the comical to accept that there was ever a surplus in federal revenue. When the government is the silent partner in every business transaction, you develop a culture that accepts that wealth is not created through the risk of the market and the labor of hard work, but is just tallied up at the end of the month. Fantasy land of public policy is better than even the Orlando version.

Is there an adverse consequence if official projects don't materialize? The closest brush with economic liability could mean a devaluation of a country's currency, but even those prospects don't dispel these modern day counterfeiters, from their appointed tasks of public service. And those trade deficit balances! Who cares, they don't mean anything.

Believing that there ever was a surplus is placing more faith into the prospects of the political class, than waiting for the tooth fairy to reward you for the natural process of regeneration. Now that a vital national excuse has been found and made into a mission of purpose, all bets are off were this will end up . . .

The point that is overlooked is that circumstances never really changed from the income side. Yes, revenues will be less because of the disruptions of the last two months. But these reductions were just magnified from an economy, who was adapting from the puncture of an excess bubble. Now the guardians of the public fortune have a convenient substitute to deflect their own inept policies. Why is it acceptable for government to act in such a manner, while the rest of the world must conform to the realities of a bound budget? Last time I looked, you are sent to jail for writing bad checks!

Trust in our institutions is destroyed when the methods employed are embedded with systemic deceit. The cruel hard facts of economic life shape the behavior of every citizen. No one can deny that they are immune from penalties, if they ignore their responsibility. Are you dining at the table of that 'Free Lunch', or are you waiting on the tables of a select few? The only surplus that exists is the extra inches around our waist. So why are you compelled to be on a continual diet when the 'Fat Cats' are feasting on the fruits of your endeavors? It is time for all to demand real reform of this bankrupt system of government finance.

James Hall aka SARTRE

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Rebuttal:

So a government cannot be compared to a business? You say the standards are different. And you hate the idea of reforming the operations of government to reflect business methods and practices. How revealing! The 'Lefty' shows his true colors with this assessment. A disaster will ensue if government is altered . . .  Well, there you have it folks; the vision of dependency supersedes that of accountability to the citizen.

Business is about providing what the buyer wants, desires and needs. Isn't that the function for government that we all should seek? Public needs and protections have legitimate functions for a government. Examples weights and measures, contract enforcement and stable currency, qualify for valid involvements. Home land defense is a worthy goal. But does the central government consider these areas their real mission? I think not!

Commissar James is clueless about business. He views commerce in terms of products and services, when it is really about satisfying appetites of varied peoples. Their necessities are needs to be satisfied, and is the primary role of business interaction. Government has a part in fulfilling some of these requirements. So why is there some mystery that precludes any government from competing in the market of buyers and sellers? FORCE is the answer. And the fallacy of government PRIMACY, over the individual is the justification for this scam.

Buying into this idiocy, only produces a surplus of serfs. Bureaucratic addicts, like the 'bad seed', fear retraction in public functions more than public debt, higher taxes or unaccountability. Manufacturing phantom roles for government to rationalize that it needs to be exempt from the 'rules of nature', is the only expertise that these 'civic servants' are capable of serving. They advance their own limited interests at the expense of the public good. Nation building is the province of people. Government is the prolific destroyer of individual incentive. For James, that is paradise . . .  the people want it that way!

James Hall - 'The Right'


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Like other occult techniques of divination, the statistical method has a private jargon deliberately contrived to obscure its methods from non-practitioners.
 G. O. Ashley

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