Thinking About the Economy: Let’s Stop Simplifying

Within the last few days, I have seen one journalist after another recycle the following idea:

Both parties agree that we need to reduce the deficit by the same amount — by $4 trillion. So what choices are we going to make to reach that goal? Either we ask the wealthiest Americans to pay their fair share in taxes, or we’re going to have to ask seniors to pay more for Medicare. We can’t afford to do both.

I know it’s fun to condescend to the President and the Congress, but seriously, people, it’s so much more complicated than this. Just think about it. When in your field of knowledge or your professional specialization, somebody comes up with a gross simplification of this kind, how does that make you feel?

In the novel Heart of a Dog by a great Russian writer of the Stalinist era Mikhail Bulgakov (and, incidentally, Stalin’s favorite writer), the main character, Sharikov, is transformed from a dog into a human being. He shocks his highly intellectual creators with his simplistic view of history. After reading the correspondence between Engels and Kautsky, the former dog announces that he knows how to fix the economy of the world: “We need to take everything from everybody and share it equally”, Sharikov announces.

Please, let’s stop imitating Sharikov already in his inane views of how the economy actually works.

7 thoughts on “Thinking About the Economy: Let’s Stop Simplifying”

  1. What seems to have gone missing in these discussions is loss of corporate taxes.

    Also, a willingness to look at overspending by those who say tax the rich. For example, you recently wrote about the UC system. Sorry, I don’t have the source (I will try to remember where I read this) but apparently administrative positions have increased many times more than faculty positions in recent years.

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    1. I agree completely that the bureaucracy in this country is humongous and unreasonable. It just exists to sap resources and reproduces on a crazy scale. People tend to interpret the calls to cut spending as necessarily meaning that Medicare and Spcial Security should be destroyed. However, there are many many other areas where spending could be cut productively.

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      1. Yes, and the military wastes incredible amounts of the huge chunk of the budget it is alloted; not only that billions in military spending are not accounted for every year.

        The corporate tax thing is a big deal, apparently many corporations pay no taxes at all today, compared to tons in the 60’s for example. Again sorry for not having citations at my fingertips.

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