The Parable of Bedrock’s Fiscal Cliff
| December 7, 2012
If Wilma can teach Fred Debtstone that Bedrock’s national deficit is nothing to fear, could there be hope for the U.S. Congress?
“Yabba Dabba Do” echoed in the hills just as Bedrock’s fiscal cliff dwellers took their first sip of morning coffee.
Annoyed they shouted back, “Quiet Fred.” “Shut up Debtstone.”
Fred ignored them and hollered again, “We’ve got to end this deficit spending or the devil’s deficit hawks will pick our bones.”
Grabbing her coffee Wilma went next door. Betty and Barney asked, “What’s up with Fred?”
“I’m so worried,” said Betty. “He’s been obsessing about deficits, he walks around muttering about how interest rates are going to squash investment and how inflation is going to wreck the economy. He’s insisting that Bedrock reduce senior’s social security, cut spending on education, and reduce funding for programs that keep food on the tables of the unemployed. I think Fred’s losing it.”
Just then the front window shattered and The Bedrock Post landed at their feet. The headline, “Millions unemployed, record bankruptcies, CEOs pocket billions.”
Betty tugged Barney’s sleeve, “Do you think you can get Fred to see reality?”
Wilma chimed in, “Yeah Barney. Fred has to see that Bedrock’s actually existing economic crisis demands our attention now. Why is he even worrying about problems that might or might not materialize years from now?”
They stopped in mid-sentence and asked, “What’s that?” Listening hard they heard, “Budget cuts are cursed, Put women and children First.” Demonstrators were marching up the fiscal cliff.
Wilma shouted, “Fred, get in here now! What’ve you done to incite this protest?”
“If we don’t get our fiscal house in order Bedrock will collapse. My household, your household, we have to balance our budgets. So does Bedrock. Everybody knows that. To get to budgetary balance, to reduce our deficit we have to cut programs. I know it’s hard, but it’s necessary.”
Barney shook his head sadly. Turning to Fred he argued, “Look. The election results don’t mean diddly to Bedrock’s elite, they’re still waging war on women’s economic wellbeing. Pretty much every program that’s on the chopping block affects women ability to materially sustain their lives. Don’t you realize most discretionary spending programs help lower income people, and they’re disproportionately women. And when governments spend less, more women than men are thrown out of work because women are the majority of public sector employees.”
Wilma chimed in, “Fred, what’s gotten into you? You’re not rich, you don’t own a corporation or a hedge fund. Why are you acting as if you do.”
Betty, turning to Wilma and Barney, said, “It’s blowing my mind that the politicians are calling for austerity. Don’t they realize that the states, cities and towns of Bedrock have already cut their programs to the bone? States have had to cut almost $600 billion out of education, libraries, health care, and a host of other programs so many people, especially women, depend upon.
Wilma and Betty looked at Fred in disgust. “You’d better change your tune old man. There’s always plenty of money for wars and prisons. But you cry broke when it’s time to fund programs that matter to us.”
“No, no that’s just not true,” shouted Fred. “You’ve got to listen too me. If we don’t cut government spending, if we don’t turn to austerity the markets …”
“To hell with you Fred,” they said. And without a backward glance they took off to join the protest.
Fred burst into tears.
“Hush Fred, it’s gonna be ok,” said Barney. “Look at it this way. The federal government’s not like households or businesses. Sooner or later we’ll die. Businesses get bought and sold. Sometimes they fail. But these things can’t happen to the United States of Bedrock. Fred, look at me. Bedrock’s budget’s been balanced a few times, but each time it was the economy collapsed. It’s austerity and obsessing about deficits, not spending on important national projects, that’ll send us over the fiscal cliff.
“But Barney, the deficit. It’s 1.3 trillion dollars. That’s so much money. We owe over four thousand dollars apiece. Where are we supposed to get that kind of money? I know I don’t have it.”
“You don’t understand Fred. Sure Bedrock borrows. When the loans come due, we pay them off with borrowed money. The world loves us for this. That’s why interest rates on our national debt are at historic lows. Everybody wants to lend to us. And we should oblige so we can spend more—have a bigger deficit—and get the economy on track.
“Barney, it’s too risky to owe so much. We’re in serious trouble.”
“Stop listening to deficit hawks Fred. Yeah, the deficit will be about 7.6 percent of the Bedrock’s GDP this fiscal year. But that’s no cause for hysteria. Under President Reaganstone, the deficit hit 6 percent of the economy. Catch this dude. Sixty years ago the deficit was way bigger—30.3 percent of the economy.”
“But government spending is out of control. We’re spending trillions we don’t have. We can’t risk cutting the military so we have to cut domestic programs.”
“Breathe deep Buddy. Government spending has not mushroomed out of control. In fact, if all the unemployed found work tomorrow, the current budget would be in a surplus because of all the taxes the newly employed would pay. The economic collapse caused tax receipts to plummet. Taxes, Fred, are paid on income, so when half a million people per month are losing their jobs, both the federal government and the states are gonna face sharply reduced tax revenue. That’s what’s caused the jump in the deficit.”
Fred slumped against the wall and shook his head. “Barney, you’ve been my bff for a long time. I think you’re right. Those cunning richsters, they thought they could fool me because I didn’t understand Bedrock’s bookkeeping. Those creeps who want to leave women high and dry, they need to hear from us. We’ve gotta catch up with our wives. Wilma!”
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