How the Government Actually Does Budgeting

There is goodwill and homework type budgeting which includes doing homework on all the things the government does and understanding the more mental work put in by the top, the more efficient the government will run.  Resources are allocated according to need and understanding.  Appreciation is given to the necessary stress the government puts on society to ensure we are accountable to each other and the world.  It is not the government but human innovation and values that increase the size of government.

There is also emotional budgeting focusing on temptation….giving as much money to convenience (tax cuts), over funding pride, power, and security (military, other security) and defunding vulnerable diplomacy, and accountability and stress (regulators), and cynicism to any force of goodwill (safety net, foreign aid).  You score “wins” by taking money from these small entities and avoid large budget items that require courage.

Forward thinking companies make an extra effort to hear all ideas, accept risk and failure, and protect the pride of those that think different, but our congress is an institution of high pride fear with many seeking to take down anyone that may argue for change or resources or tell us what we need to hear.

United States GDP and Unemployment History

The growth of the gross domestic product (GDP) minus inflation or Real GDP is a good indicator of the growth of the economy.  Asset prices are not the economy.  Debt is not the economy. The hard work of producing goods and services is.  The combined efforts of everyone’s physical labor and brains improve the quality of life year after year.  Does that mean it is always desirable to grow the economy at any cost? No, we may desire less work or different work for quality of life or refrain from some production due to environmental impact.

As safety net programs have been implemented, presidents have changed, environmental and safety regulations implemented, and healthcare improved, the economy has not changed drastically.  As long as the incentive to work hard the next day is still there the government has a lot of leverage and say on what our values are.

There is little evidence to say people work harder or less when taxes go up or down.  Tax laws pick winners and losers or we can add leverage to the national debt in exchange for higher individual net worth.

The other big statistic is jobs.  People don’t like threats to their jobs, but that threat is far greater from a dynamic capitalistic system than from government activity.  Most job losses are gained elsewhere as humanity developed better transportation, the electricity grid, more tourism, the computer, the internet and so on.  Unemployment has fluctuated very little with regulations, taxes, and safety net programs.

The .com, housing, and now the coronavirus have all spiked unemployment.  In the cases of .com and housing the economy was positioned around a certain asset and then that asset wasn’t what we thought it was.  In time the economy adapts.

The federal reserve has a lot of power over unemployment based on how it sets interest rates.  Though there is a lag as businesses have access to more money and then decide to hire.  The reason for higher interest rates is to control inflation.  Exceptions are usually asset bubbles like in 2000 and 2008.  The economy repositions naturally in time.

People will continue to want to trade each other for food, health care, housing, things etc…there is nothing to fear on the economy falling off some cliff as long as the government is empowered to save the day if needed.  The economy has transformed itself through many technological innovations, wars, infrastructure initiatives with maintaining consistent growth.  Economic growth mostly comes from productivity growth, improving processes, developing technology etc. Once a new technology is developed or a manufacturing process is improved, we don’t lose that ability, we work on the next one.  This is not to say asset bubbles can’t happen, but asset prices aren’t the economy.  When an asset isn’t worth what we thought it was (.com and housing bubbles) that industry loses jobs but in time the slack is picked up.

The economy is our ability to produce goods and services tomorrow to satisfy our needs.  Assets are things that can be traded in for goods and services.  In truth, if everyone owns a lot of assets, it puts a strain on labor that needs to work to support those trading in assets for labor.  They also have to do more work to buy anything.  There is always the temptation for us to create asset bubbles but it wouldn’t hinder our ability to take care of each other.  The government can always create demand, deficit spend or print money. 

Remembering the Great Depression

“With impressive proof on all sides of magnificent progress, no one can rightly deny the fundamental correctness of our economic system.”

Herbert Hoover

(Republican President during the Great Depression)

“No party ever accepted a more difficult task of reconstruction than did the republican party in 1921.  The record of these 7 ½ years constitutes a period of rare courage in leadership and constructive action.  Never has a political party been able to look back upon a similar period with more satisfaction.”

Herbert Hoover

Republicans continued to emphasize balanced budgets and protecting the rich after the economic collapse.  Unemployment continued to rise through the remainder of their time in power from 1929 to 1933.  The new deal programs helped recover employment but were argued by many not to be enough.  Ultimately the depression ended with world war II which included massive government spending, high taxes, wealth of the rich wiped out, and government dictating where production goes.

“Competition has been shown to be useful up to a certain point and no further, but cooperation, which is the thing we must strive for today, begins where competition leaves off.”

Franklin D. Roosevelt

References

  1. U.S. Bureau of Economic Analysis. Gross Domestic Product. Supplemental Information and Additional Information Tab. Current-Dollar and “real” GDP. https://www.bea.gov/data/gdp/gross-domestic-product. Accessed June 7, 2020.
  2. U.S. Bureau of Labor Statistics. Labor Force, Employment, and Unemployment 1929-39: Estimating Methods. Table 1 Total Labor Force Classified by Employment Status, 1929-1947. https://www.bls.gov/opub/mlr/1948/article/pdf/labor-force-employment-and-unemployment-1929-39-estimating-methods.pdf. Accessed April 7, 2020.
  3. U.S. Bureau of Labor Statistics. Databases, Tables & Calculators by Subject. (SEAS) Unemployment Rate. More Formatting Options. All years, All time periods. https://data.bls.gov/timeseries/LNS14000000. Accessed June 20, 2020.
  4. Macrotrends.net. Federal Funds Rate – 62 Year Historical Chart. https://www.macrotrends.net/2015/fed-funds-rate-historical-chart. Accessed April 7, 2020.

Giving Hope to What We Can’t See

We all interact and see interactions of people willing to act in goodwill with people they can see.  If you know somebody’s story, see their face, you are more apt to help them.  If they look familiar to you, worship the same religion, abide by the culture you will be more giving.  A service industry worker will do better receiving tips than a flat pay.  If someone in your life is struggling you may help them based on their needs and abilities.

But in society we also need to give hope to those we can’t see.  Humanity is generally good at helping those within its own village but when natural economic conditions segregate society, dealing with forced goodwill (taxes), or dealing with goodwill outside the circle of the army (other countries) goodwill is not as easy to come by but it is still important.

Every year the United States government spends more than charities do on goodwill including Medicaid, food stamps, unemployment, housing etc.  It also subsidizes charitable giving.  This doesn’t include Social Security or Medicare because those are just more dignified ways of taking for our seniors than everyone doing it privately and everyone may benefit from these programs. 

It is impossible to tell everyone’s story and it can be easy to create cynicism about forced goodwill but what kind of culture and society does hope to the bottom create or cynicism to the bottom?  How meaningful is cherry-picking or otherwise creating cynical stories about government goodwill?  Is it realistic that voluntary goodwill can plug all the needed holes alone?

The government does a lot of heavy lifting on goodwill and charities fill in the cracks, together this goodwill is an important part of who we are, our soul, and what we wish the country to stand for.

For alongside our famous individualism, there’s another ingredient in the American saga. A belief that we’re all connected as one people.

If there is a child on the south side of Chicago who can’t read, that matters to me, even if it’s not my child. If there’s a senior citizen somewhere who can’t pay for their prescription drugs, and has to choose between medicine and the rent, that makes my life poorer, even if it’s not my grandparent. If there’s an Arab American family being rounded up without benefit of an attorney or due process, that threatens my civil liberties.

It is that fundamental belief, it is that fundamental belief, I am my brother’s keeper, I am my sister’s keeper that makes this country work. It’s what allows us to pursue our individual dreams and yet still come together as one American family.

For alongside our famous individualism, there’s another ingredient in the American saga. A belief that we’re all connected as one people.

E pluribus unum. Out of many, one.

President Barack Obama (2004 Convention Speech)

Image Reference

Adobe Stock / Ipopba

Pulling Society Toward Goodwill

Getting people to use their brains to associate positive aspects of society with doing the right thing.

Humility – looking past the initial dagger to one’s pride and seeing the bigger picture.

Caring / Love – don’t exist without accepting others and ourselves own faults.  A judgeless relationship.

Hope – taking the vulnerable or hard work position when faced with unknowns such as doing something new, relationships, dreaming, safety net.

Joy – a group putting in work or giving into hope and having it come to fruition.  Accepting one another.

Engaging – doing brainwork to understand where each other is coming from and acting in goodwill.

Sportsmanship – we like to compete for earned pride but we also protect the opponent’s pride.  Games of pride make us feel alive but they should all exist under some moral fabric.

Working Pride – pride that comes from hard work, accomplishing something over time.

Education – putting in brainwork to accept the right answer over the temptation.

Respect / Manners – putting in work to raise society up and away from crudeness, grumpiness, boys club etc.

Courage / Honor / Integrity – facing fear for the collective, overcome convenience and toward doing the right thing.  Honor doesn’t exist in a society that refuses to accept shame.

General Work – putting ourselves to work (viewed as attractive) to avoid making hell at the expense of others, unattractive laziness, gossip, judging.  Even in biblical times there are warnings of undesirable outcomes from idleness and gossiping.  With communication now at hyper speed, news everywhere and social media everywhere it doesn’t lead us to putting our best foot forward always.

Energy – The end of slavery, the environmental movement, civil rights, women’s right to vote, 40 hour work weeks, worker safety, a progressive tax system, food stamps etc. do not happen by themselves.  They are made to happen.  It takes both energy in the form of activism, free speech, political movements and a good clear message and educating others on what you want to change.

“Things don’t happen, they are made to happen”

John F. Kennedy

The key to a successful society is to not let our emotions control us.  In many cases we have to use our own moral compass to overwrite an initial fear, convenient answer, or desire to avoid a problem.  Like a defiant child maturing and realizing some of the joys that can be had in buying into the work needed to be a contributing member of the family or team, there is no reason we can’t move past this phase into something more hopeful, more joyful.  A group united in its enemies of compassion and foreignness is not a group worth existing in.

Image Reference

Shutterstock: STILLFX

Pulling Society Away from Goodwill

Some of the ways we as a society are divided and pulled away from goodwill, purpose, harmony and joy:

Note that in politics the reason and the strategy are different.  For example, slander is a strategy not a motive.  Using crowds and creating energy can be viewed as a strategy for any reason. Suppressing dissenting voices can be a strategy of any regime in power whether it believes its end goals are good or bad.  Pride, convenience, and fear are both strategies and motives.  For example, if you are mostly motivated by convenience (tax cuts) but you need votes, you might play up an immigration fear as a strategy or insecurity in foreign affairs.  Voter suppression, gerrymandering congressional districts and playing games with court seats are all strategies.

Greed – Seeking pride and convenience through monetary means at the expense of the ecosystem, seeking security (fear avoidance).

Convince others society isn’t selfless / compassionate – if society isn’t viewed as selfless it will convince us to not be a fool and look out for ourselves as well.

Distrust – playing up distrust to the collective and playing up individualism – guns, money, hording, conspiracy theories.

Immigration Fears – creating fear around something complex to get votes.

Strong on crime – creating fear around something complex to get votes.

Economic fears – using the economy or jobs as a fear creator without supplying proper brainwork.

Bringing others down to your level – if you feel you and your group are engaging in something you are not supposed to, you want everyone involved to make you feel more secure.

Exploiting – vote for me and I’ll exploit this country / entity.  I was good at exploiting the system for my company so I can do the same for country.  Making up reasons on why environmental, fiscal or other ecosystems need to be exploited.

Limited Resources – Given goodwill will try to provide for all, you convincing the voting majority that there is a limited resource and if we try to provide for all it will burden the majority.  Examples include healthcare, oil, food stamps, general taxes, water out west etc.

Avoiding accountability – never putting yourself in the brainwork, vulnerability position.  Always having a fall person.

Pride over principles – Turning your political reality away from principles and into “winning” for your tribe. Being a country of principles should be an inspiring reality.  The human heart drives peace but the brain is the peacemaker.  If you chose the self-serving non vulnerable solution for every disagreement and forsake the brain, never-ending war is inevitable.

To owe or to be owed? – it can feel insecure to feel like we owe someone a debt.  That we owe something for the society we are given.  Some will use terms like “taxpayer” to sell an idea of being owed.  The idea of me and my boys are wronged anytime the government does something of goodwill is attractive to some.  A military draft is a great ask of a country upon a family.  Using the tax system to plug a hole so someone can put food on the table isn’t. Those actually in need rarely use an entitled tone.

“A full pocketbook often groans more loudly than an empty stomach”

Franklin D. Roosevelt

Associating wealth absolutely with work – We view work in a positive light and laziness in a negative light.  That doesn’t mean all wealth is worked equally hard for or that we should give up on all of those that need a hand up, or those that need help aren’t willing to work hard in the right environment.  This mindset is oversimplifying and attempts to remove our obligations to those in need.  For example, an Ayn Rand novel.

Stubbornness / Avoiding necessary change – change requires overcoming the fear of the unknown, the inconvenience of brainwork, and overcoming pride that an existing behavior needs changed.

Strongmen/Insecurity – Our insecurity in foreign affairs leads us to be attracted to those promising wins and strength in the face of any foreign disagreement, trade negotiation, disputed territory etc.  We want to see scowls, tough talk, and simple answers in our diplomacy over respect, understanding problems and a will for all countries to be successful.  Giving in to this leads to cold wars, trade wars, actual wars, etc.  Diplomacy is an imperfect art but its greatest adversary is the internal struggle from each country to empower it.  Any decision to have your group put in some effort for those outside the group requires vulnerability which the temptation is to avoid.

Electing the strongman doesn’t lead to freedom…quite the opposite.

  1. Elect strongman selling pride, fear, and protection from insecurity
  2. Be afraid of strongman and avoid brainwork/vulnerability, do whatever he says
  3. No morality around to save anyone by way of compassion
  4. His excuses are the law, the actual law doesn’t matter
  5. Dictatorship

Under taxing – it is very hard to have a quality discussion on the federal budget or taxes.  How can you be knowledgeable about the entire budget?  It is also quite foreign in that much of it is misunderstood by the public and controlled by people foreign to us.  Likewise, its effect on the economy is not well understood.  This leads to many picking the most cynical and convenient outcome and using words like common sense, stick within its means, intuitive etc. 

Group supremacy – It can be attractive to be told you are special and you can be part of a group not burdened by morality or homework and win against groups you choose to dehumanize.  Nationalism, gangs, Enron cultures in business are ways you might achieve pride for yourself at the expense of the greater good.

Racism / Ostracizing minorities – being uncomfortable with foreign behaviors and beliefs, a desire for supremacy to another group, a common enemy to unite your group around.

Cynicism – The message in cynicism is you are a fool if you believe the answer is effort, work, hope, understanding, mental engagement.  The fiscal conservative message is largely based on this notion of being cynical around either the safety net, federal institution efficiency, or resources going outside the group without putting much, if any work into understanding the situation.

Spinning words and literature – taking a word or literature that has a positive or negative view from society and giving it another definition without giving the definition.  Family, support the troops, Christianity, patriotism.  In normal discussions these mean giving but not in always in politics.  Family can mean acting selfishly. Support the troops can mean don’t question the war.  You can remove the values from religion and turn it into winning and believe a story. Freedom and liberty can mean freedom from hierarchical oppression or freedom from moral obligations.  Being told what to do in either case creates the same feeling right? America itself can just mean things that make you feel good and are familiar or it can mean something of substance, with values.  Some will emphasize Islamic terrorism or communism to create a simplistic us vs them culture even though the moral wrongs of the groups they reference have little to do with religion or the communist ideology.

Personal Takedowns – it can be much easier to take down the individual making the inconvenient argument than to go after the argument itself.  Political questions by nature involve uncertainty such as healthcare, foreign policy, safety net effectiveness.  Once you demonize the people of the day standing for idealism you then use their names as slander, as something to defeat.  Focusing on gaffes or perceived gaffes instead of ideas.

“I understood the infamous spiritual terror which this movement exerts, particular on the bourgeoisie, which is neither morally nor mentally equal to such attacks; at a given sign it unleashes a veritable barrage of lies and slanders against whatever adversary seems most dangerous, until the nerves of the attacked persons break down….This is a tactic based on precise calculation of all human weaknesses, and its result will lead to success with almost mathematical certainty.”

Adolf Hitler

Other Methods – These were used in Hitler’s 1939 speech in response to FDR asking if 31 surrounding countries are under threat prior to the start of WWII or general techniques the Nazis used in annexing territory prior to armed conflict. He is certainly not the only bad actor to use these techniques.

  • Calling goodwill a hypocrite (US revolution, Indians, Civil War)
  • Doesn’t goodwill have better things to do?
  • My group has been wronged. (Treaty of Versailles after WWI)
  • Intimidate the groups you want to bully and ask them if they feel threatened. (Hitler writes all the countries under threat and “asks” them if they feel threatened.)
  • Make agreements you have no intent to keep and blame the other side when you want to break them.
  • Taking over territory is “liberating” it.
  • Germany is coming in to protect the Germans in the area from getting bullied in stories you make up.

Prejudice – definition: preconceived opinion that is not based on reason or actual experience.

Another definition: Pick the emotionally attractive solution without engaging the brain, usually to avoid problems, avoid fear, avoid change, rebellion against authority, to give into the strongman, or pick the self-serving solution.

Prejudice exists in some form around many tribal belief systems but some of the belief systems themselves were created with prejudice and some were not.  Some morality systems are based on giving and some are not.

Tribalism multiplies temptation or goodwill

  • If it is hard to act in goodwill and not with pride it is harder to ask your tribe to do the same.
  • Once you are in a group that justifies immorality in favor for pride it is hard to stop that snowball.
  • Work or courage for the group is contagious and can bring joy.
  • Honor systems can be effective and warm one’s heart.

Image Reference

Shutterstock: Lightspring