Tuesday, November 18, 2008

There's No Free Lunch; Except in World of Politics

Wouldn't it be wonderful to live in a world where there were no prices? If you happened to want a Rolex or a Rolls-Royce, you could just go get one-- or two if you wanted-- and not have to worry about ugly little things like price tags.

There is such a world. It is the world of political rhetoric. No wonder so many people are attracted to that world. It would be a great place to live.
Politics offers something similar. Theoretically, political decisions are limited by budgets. But for many experienced politicians, that limit is mostly theoretical.

Government budgets, after all, are only projections of what is supposed to happen, not a hard and fast record of what has in fact happened. And seldom will the public or the media do anything so mean-spirited as go back and compare what the budget said would happen with what actually happened.

Politicians have more ways of escaping from prices than Houdini had ways of escaping from locks. When savvy pols want to hand out goodies, but don't want to take responsibility for raising taxes to pay for them, they can tax people who can't vote-- namely the next generation-- by getting the money by selling government bonds that future taxpayers will have to redeem.

Even such deficit spending leaves a record, however-- a national debt that is the ghost of Christmas past (see chart above). But politicians can even get around that.

The most politically painless way to hand out goodies, without taking responsibility for their costs, is to pass a law saying that somebody else must provide those goodies at their expense, while the politicians take credit for generosity and compassion.

But there really is no free lunch, except in the world of political rhetoric, a world that so many want to be in, where they can play Santa Claus without even the cost of buying a costume.


At 11/19/2008 8:04 AM, Blogger RightMichigan.com said...

That bar graph is one heck of a punch to the gut, isn't it?



At 11/19/2008 2:53 PM, Anonymous Anonymous said...

RE: Debt Graph

Wouldn't it be wonderful if economic professors used semi-log scales?


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