Government "spending" vs. "recirculation"

There is a very good book called The Gardens of Democracy (Eric Liu and Nick Hanauer) that has a lot to say about economics. The economy is a garden rather than a machine. Cooperation is as important as competition. The government has a key role in a properly functioning economy, etc. The book essentially says it all for me.

One of the powerful points they make, among very many, is that a lot of people have a misconception of government activity as merely "spending." There is this idea that government spending somehow vacuums money away into a black hole. The Republicans encourage this view. They want people to think zero sum, as if the wealth of the country is like a pie. They want people to think government is taking away a huge chunk of the pie, either to redistribute it to the undeserving or just to waste it. That is a central theme in the Republican economic mythos and a keystone in their argument demonizing the government. Unfortunately, the Republicans' simplistic view (and self-serving in the case of the Republican wealthy) is wrong and destructive.

In the book, the discussion starts on p. 103 at the bottom. Italics all the book authors'.

...there is an even deeper misconception at work here. Conventional Machinebrain wisdom conceives of and describes government activity as "spending."...The association we have with the word spending is that when government does it, our money is gone. The unconscious assumption is that our tax dollars are swept into piles and burned or poured down a drain....The government, like a car engine, uses up money like fuel. Of course, this ignores the fundamental reality of the role of money in an economic ecosystem as essential lifeblood that circulates throughout it again and again.

In this Gardenbrain sense, government does not spend money; it circulates it. It does not redistribute money; it recirculates it. Social Security is the largest line item of government "spending" in the budget. But Social Security is simply a collateralized savings account. Understood as circulation, Social Security's main benefit isn't to keep the elderly from living in cardboard boxes, although that is a fine thing, but to ensure that they continue as dynamic consumers in our economy. Social Security circulates money back to the citizens who contributed to it in the first place, and is then circulated again by them, generating increased economic activity that allows others to be paid, to contribute to Social Security and then to receive those benefits in the future, in an endless and essential positive feedback loop that sustains and expands our economy. If Social Security truly were "spending," then our economy would be getting smaller and our nation's net worth would be shrinking as a consequence of its growth.

...Even the lowly, lazy, useless bureaucrat is some small business's best customer.

It's not just a birther joke at all.

When Romney says, "No one’s ever asked to see my birth certificate," the birther reference is damaging. Romney isn't a birther, of course, but he is giving himself away as someone who wants to laugh with the birthers, not at them. He is giving them "moral" support, validating them, and probably enabling them. All true.

But I think the more politically damaging aspects of it are about Romney's cloying privilege, and especially about Romney placing himself above immigrants with his quote. Romney may never be asked to show his birth certificate, but a lot of people are asked. I doubt they find Romney's joke funny at all. I would like to see Romney make the same "joke" in Arizona or standing among Hispanics. Romney may have intended a swipe at Obama and a wink to the mouth-breathing birthers, but he stupidly just set himself above Hispanics and other immigrants. Romney made it clear that he's not one of those folks who need their birth certificates checked. I have no doubt they picked up on it.

And then, of course, he lied to CBS about it right away. Romney doesn't want to be caught blowing a kiss to the birthers, and he certainly doesn't want this to be his Akin moment with Hispanics. So he tells everyone it wasn't a swipe at Obama at all. Of course not, Mitt. Of course not.

The Romney/Ryan plan is just a sneaky trap. They've lost the election.

No over-55 senior in their right mind would believe that letting the Republicans screw younger workers would be a one-act play. The second the Romney/Ryan "gradual" Plan passed the Republican Congress and was signed into law, the Republicans would pull out one of their beloved privatization bills. Paul Ryan and his idol George W. Bush were big privatizers, and now there would be no reason for younger workers not to go along. The Republicans would pass privatization without a roll call. Dems wouldn't be able to fight it, because they would be in the minority and because younger workers would be so universally in favor of it.

Then younger workers would pull out of the system in droves, de-funding both Social Security and Medicare.

Why are Republicans playing dangerous political games like this with people's lives and retirement security? Even bringing up a generational divide-and-conquer scheme like this is irresponsible. It's not bold, it's crazy. Either Republicans don't know how destructive they are, or they do.

Why not go to Ryan's Medicare Lite plan right after the election?

If Ryan and Romney win, and the Republicans get control of the House and Senate, I don't see why they wouldn't just implement their Medicare Lite plan right away. Why wait ten years? The Tea Partiers all seem to think it is such a great idea for the country and for people 55 and younger. Why would they not let current seniors in on the fun right away? What would stop them?

The news media says that Republicans say Ryan is a bold thinker and straight talker. He must have a really good reason for delaying and phasing in the major improvements he wants to make in Medicare so that only people 55 and younger get them. Ryan and Romney probably assume that current retirees are much more selfless and willing to sacrifice their Medicare benefits than people 55 and younger. Older people are willing to wait for the Romney/Ryan Medicare bonanza. They would accept putting off the changes until ten years from now.

Well, I just don't think that is fair. Current seniors are entitled to the same good Medicare deal that Romney, Ryan, and the rest of the Republicans have in store for people 55 and under. And I'm sure that if Republicans get back control of the government like they had under George W. Bush, this wrong will be addressed. Current seniors will get the good Republican Medicare right away. Everyone will get the good Republican everything right away.

Wealthy shaking in their boots about Romney's taxes?

I'll bet the very wealthy, Romney's biggest backers, are apoplectic about the idea that he might be forced to release his tax returns. They won't let that happen. The last thing they need is for the American people to be educated on just how far the wealthy can go to avoid paying taxes.

It's not just that Americans would be so disgusted they wouldn't want to see Romney himself as president. They might raise a wholesale backlash against "Romney types." The whole shell game might be given away.

Romney isn't just hiding his own returns. He is hiding and threatening to expose the loopholes and chicanery of everyone like him.