The first line of today's article on The Automatic Earth is: He really said it. The nation must "continue to spend our way out of this recession".
The he referenced in the statement is President Obama.
I'm sure Ilargi has some wonderful arguments. I just want to, kind of, think out loud about that statement.
There's a law of finiteness. Everything on earth is finite. There's this much of everything we have. Some things seem to be in infinite supply, because they don't ever get used up, but in reality, those things are merely recycled, infinitely, like water. But there really is only as much water as there is, and then, there is no more. If we, humans, could figure out how to interrupt the watercycle, and somewhere in there, start consuming the water so that it couldn't be recycled (like we did with oil), then we'd learn about the law of finiteness, pretty damned quick.
But let's concentrate on that statement: we must "continue to spend our way out of this recession."
Who, does he suggest, do the spending? The fact is that Deus Ex Machina and I make XX dollars per year, divided up into weekly (or monthly, in my case) pay checks. A portion of that money is taken by the government to run its various programs. Some other sum goes to the insurance company so that we can be comforted by the idea that in the event of a catastrophic medical emergency, the cost of our care is covered (minus the deductible, of course). What's left is ours to spend at our discretion.
We pay a portion to the bank that holds our mortgage for the privilege of continuing to live in this house. We pay a portion to the grocery store for the foodstuff and other goods they purchase from manufacturers and stock in their stores. We pay a portion to CMP for delivering our electricity. We pay a portion to the gas company for delivering our propane so that we have hot water. We pay a portion to the phone company so that we have phone and Internet service.
Some of our money goes to local farmers for our food. In fact, we'll be paying for a quarter of a cow and the butchering fees sometime this week. Last weekend, I gave the farm store $85 for produce and apple cider (which is fermenting right now to make hard cider ... yum!).
Our dance school gets a portion each month for the girls' classes, and we give a bit to the music teachers for lessons.
Then there are things like maintenance and repairs on the cars and gasoline for getting around, and other little miscellaneous expenses we should track, but don't.
Whatever's left after we've done all of that is what we should be using to "spend our way out of the recession", but truth be told, after all of that, there isn't much left.
People, who are currently unemployed or who make less than what Deus Ex Machina and I make, are living at or below their means (that is, not buying on credit cards or taking out loans), and don't have that little bit of extra to spend their way "out of the recession." Almost all of what they make goes just to pay for the daily cost of living in this country - rent, food, gasoline, electricity ....
I think such a comment is ridiculous, and short-sighted, and misguided, and uninformed, and misleading. I think it's an idiotic comment to make, especially to a nation that is struggling just to not be hungry or cold. Ridiculous and naive. It's akin to Rousseau's princess exclaiming "Let them eat cake."
Ha! That's exactly what it is.
"But Sir, the people have no bread to eat."
Says Monsieur le Presidente, "Let them eat cake!"
Of course! Why didn't we think of that? Let's just "spend our way out of the recession." Gimme that damned credit card. I'm a-goin' to Wal-Mart to buy me a flat-screened tv so that I can watch Dancin' With the Stars!
And back in 2001, when the jets hit the World Trade Center, we were encouraged to continue going about our daily lives - go to the mall, go buy stuff. Retail therapy is strong medicine.
But at some point, we have to wake from our spending-induced coma and look around at where we really are.
If I have four oranges, and I eat four oranges, there are no more oranges until the tree produces next year. If it's a bad year, and something happens to the tree, I may not get any more oranges at all.
It's that simple. There is only as much as there is, and when it's gone, that's it. Even a child can understand that concept.
I wonder why our leaders in Washington can't seem to get it. We can't spend what we don't have.