Re: Ideology and Economics

["John Gelles" <indexed-savings@xxxxxxxxxxxxx>]

"...why it is not transparently wrong-headed to
suggest that Government Deficit incurred in
financing useful projects is 'bad' while Private
Sector borrowing for the self-same projects is
'good'."  -- so asks Gunnar Tomasson and his
unnamed friend.

Logically speaking, private sector borrowing by
credit worthy applicants for private sector loans
of wealth -- to be repaid from future cash flows
and profits -- appeals to (and is called 'good' by
people with faith in such repayment power (with-
in months and years, not decades and longer time
periods) as evidence of the efficiency of markets
and consumer choice as we know them.

Others of us who know that the "price" of making
a "self-same project" amenable to such period of
repayment usually means the "project" will be
"shrunk" to fit lower levels of demand than the so-
called "same project" might be -- if government
planned and financed it. For instance, rural electri-
fication might be financed by government to serve
poor customers now and millions more much later,
delaying cash flows and "profits" for decades.

The projects would, in the end, be different, not the
same.

And there are similar prejudices by anti-government
"believers" who do not like to serve government
employees if private employees can do a job. They
oppose unions of government employees. They are
convinced that government is always inefficient and
ineffective when compared to private corporations.

When projects are paid for by government but
performed by private contractors, like Halliburton
of Bechtel, resistance to them fades.

In fact, a case can be made for compromise. Some
projects can be assigned to agencies that employ
most of the workers involved, like fire and police
forces, some to government agencies that contract
out most work, and some to the private sector with
government on the side preventing fraud or other
criminal business.

What we should not compromise is government
responsibility for the 'general welfare'.  When private
finance or operations leaves society with gaping
wounds like poverty and poisoned water, government
financing and follow through ought to rule the day.

At this point the rubber hits the road -- where does
government financing originate?  Must it limit itself
to the commercial profit chain and taxation thereof?
Or does it have a duty to estimate the long term effect
of fiat money creation to organize both scarce and
excess labor, scarce and plentiful materials, to
radically increase and improve water supply, food
production, housing, defense, training and education,
health care and opportunity, etc., etc.

The ideological war between collectivists and
individualists, which on close examination appears
to be phony -- leaders on both sides being prone to
exhibit a greed for power more than a greed for saint-
hood, has been our recent travail. Before it, religious
ideology played a similar role. If we end up as all
Keynesian, with cheap money and endless comfort
enjoyed by every person, what ideology will we find
to continue the war?  How about philosophy?  The
intuitionists against the empiricists -- the pure brains
without eyes and ears, and the pure sensationalists,
with organs sensitive to every difference and not
a speck of analytical ability?