Thursday, April 14, 2011

In which I pwn Boing Boing. (?)

This post on my beloved BoingBoing irked me:
Philip Greenspun divided the U.S. 2011 federal budget by 100,000,000 and wrote a little parable:

We have a family that is spending $38,200 per year. The family's income is $21,700 per year. The family adds $16,500 in credit card debt every year in order to pay its bills. After a long and difficult debate among family members, keeping in mind that it was not going to be possible to borrow $16,500 every year forever, the parents and children agreed that a $380/year premium cable subscription could be terminated. So now the family will have to borrow only $16,120 per year.

Understanding Congress's solution to the federal deficit problem.

Oy! This is terrible economics.
Of course, many of the commenters point out that the military budget is big and other kind of predictable liberal reactions to the comparisons. Which are fine. But they entirely miss the point! One or two of the commenters have pointed out that making budget comparisons between a household and the state is a shaky enterprise, at best. If Greenspun wants to make the numbers real for people, he could instead divide budget numbers by 300,000,000 and talk about dollars per U.S. resident (I know it's more than 300 million now, but that's such a nice round number). But he specifically wants to compare the Federal budget to a family's budget. That is because this comparison is a right-wing talking point meant to give legitimacy to hacking social spending.

And that comparison is absurd. Here's why. Most families are less dysfunctional than the Federal Government (see what I did there? on to more serious matters). Families, unlike the Federal Government, do not have control over their own currency. Families may borrow with a credit card from a financial corporation, but the Federal Government borrows from individuals and institutions, many of which are right here in the U.S.! There's plenty to say about why the deficit is so large (Bush tax cuts, two wars, Great Recession), whether or not we actually need to worry about it (we don't, interest rates are really low, we're still not out of the recessionary woods yet, etc) and what to do about it if we thought it had to be dealt with (for starters, let Bush's tax cuts go away and get out of Afghanistan and Iraq). But passing off simplistic and misleading arguments like Greenspun's is counter-productive.
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