A rare post on politics

Normally I don’t write about national economics, which are generally far too complex for me. But this interview on NPR last night has been bugging me ever since I heard it.

Here’s the pertinent segment:

Basically, we’re taking money out of the economy at a time when the country needs there to be more economic activity. … This is the first time in the history of the United States that a debt ceiling increase, which is a routine thing, has been linked to deficit cuts, right – and budget cuts. This is the first time. (Democrat Keith Ellison)

This congressman seems confused. He seems to think that:

• The government having money is productive, rather than the private sector — which actually produces things, including jobs. Why else would he consider putting the brakes on spending to be “taking money out of the economy”?
• “Debt” equals “real money.”

That second one just floors me. Any average American understands that if you max out your credit card, the intelligent thing to do is to stop spending money and start paying it off — not to get a credit card with a higher credit limit and continue to increase your financial obligations. “Debt” equals “money you don’t have.”

Maybe, Mr. Ellison and company, the fact that raising the debt ceiling has been a “routine thing” for far too long is the lion’s share of the problem. It’s not a terrorist act to insist that there be a change in business as usual.

A wise and frugal Government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government. (Thomas Jefferson)