We got the bastard. Osama bin Laden is dead. But, imagine if we applied the same litmus test to military expenditures as conservatives want to apply to social security and Education….

Picture Obama and his national security team debating if the united states has enough money to pay for the operation to kill Osama Bin Laden? Before executing the plan did they ask themselves questions like, “Will this crowd out investment?” “What will be the effect on the budget?” “Who will pay for it?” “Sure it’ll put soldiers to work, but those are government jobs, not REAL jobs.” “Can we afford this?” Of course they didn’t ask themselves those questions. They asked themselves, “Is this worth doing”? They decided “yes”. Then they asked “can we do it?” They looked and found that they had soldiers with guns and helicopters with fuel and said “Yes we can”. Then they gave the order.

They did what any government should do before venturing on a public good project. They asked “Should we do it?” Then they asked “Can we do it?” And the “can we do it?” has nothing to do with money or deficits. The only thing that should be considered is if the country has the resources to accomplish it. I get so sick of politically motivated calls for “austerity” and cries of “going broken” when everyday we make decisions the correct way: Are the resources there?

Our leaders are so used to thinking in terms of money, they forget what it represents. Resources. Since the government can create and spend however much money it needs, it’s never constrained by revenue or “borrowing”. The only thing it’s constrained by is available resources. If it exceeds resources, it shows up as inflation. This simple concept somehow got lost in Washington D.C.

Let’s apply this resource attitude to areas other than military. Should we have small class sizes? “Yes”. Do we have enough teachers to hire so that we can have small class sizes? “Yes” – as evidenced by the huge numbers of unemployed teachers. This is something we can do. It has nothing to do with “do we have enough money?” We can afford to hire these teachers until there are no more competent teachers to hire. When that happens, THEN we’ll have a resource constraint and inflation will occur.

Should we fix crumbling bridges? “Yes”. Do we have the resources? Do we have enough concrete and construction workers? “Yes” We have so many out-of-work people in the construction industry that can do it. We also have huge concrete companies that are or are going out-of-business. In other words, we have the resources.

Let’s do a counter-example. Should we give everyone a big screen 3D tv? “probably not”. Do we have the resources? They aren’t 300 million 3D T.V. sets. That means that even if the federal budget was in surplus, we couldn’t “AFFORD” to give one to everybody. It will cause inflation as more money chases after an inadequate amount of goods.

I’m not saying we shouldn’t spend on the military. We should use our military when it’s needed. That’s what it’s therefore. I am saying is that as long as our economy continues to be recessed. Idle people(unemployed) and idle resources(Capital) are sitting around begging to be used. But we don’t, because we’re afraid of fictional budget restraints(budget deficits). We have an army of unemployed waiting to be used. Why not use them for the public good? There are several needs in this country. Let’s use our other “army” to make all our lives better. Go America!

  • Der Schlagzeuger

    Yeah, but who’s gonna pay for all those extra teachers and concrete? You and me that’s who! With higher taxes which are just going to push our country further into debt and destroy our children’s futures!

    Oh wait. This is an MMT blog right? So I guess you know I’m full of it. I’ll go harass that daily koos guy. Sorry.

    Go America!

    • http://www.ourdime.us/ Dustin

      To answer your question, no one has to pay for it as long as aggregate demand(i.e. demand-pull inflation) is low. The federal budget is not like a household budget. It’s constraint is inflation, not revenue. Until full-employment is reached, deficit spending will have either no, or a very low, effect on inflation.

      Here’s a question back at you. Who’s going to pay if the country doesn’t teach our kids and patch our concrete bridges? You and me that’s who! We’ll be paying for new tires when potholes ruin our tires. Or worse, we’ll pay for it with our lives when the bridges collapse(see Minnesota). How are our kids going to be productive if they don’t get a quality education? Cutting spending on worthwhile public projects is going to be more costly to the economy. That’s what will destroy our Children’s future. Not some fictional budget constraints.

  • iPhone Location Tracking

    Hey Dustin, that was a brilliant analogy. It may get lost on some but not me. Our nation needs to really take inventory and get our priorities straight.