gregorygarver.com

[Mike6664]

Politicians and journalists talk frequently about “fiscal responsibility”—lamenting that we don’t have it now, but that we need to acquire it to avoid financial disaster. Curiously, though, few of them ever define what they mean by that term; either they think it goes without saying, or they think equivocating better serves their agenda. Does it mean "eliminating" the deficit? If so, should we sometimes run surpluses? Or does it mean getting the deficit "under control"? If so, what the heck does that mean? Here are several possible, mutually-exclusive meanings for “fiscal responsibility”:• reducing the debt (dollars) • completely eliminating the debt (dollars)• balancing the budget (i.e., keeping the dollars of debt constant)• reducing the debt burden (growing GDP faster than debt)• maintaining a constant debt burden (GDP growth=debt growth)• keeping unemployment low and inflation under control (...forget debt, it doesn’t matter as long as those two stats are in good shape)Six different ways of defining “fiscal responsibility.” A foggy atmosphere like that is definitely not conducive to a rational debate. In my judgment, a strong parallel to the growth-friendly federal policy I advocate can be found in the way corporations fund their own growth. They almost never use 100% equity financing; similarly, they almost never use 100% debt financing. You can bet there’s a point somewhere in between those two extremes that minimizes the cost of capital for funding growth projects. (To test that assertion, pick a few NYSE companies at random, and see how many of them have zero long-term debt. And if you lucked out and got Microsoft in your random sample, you found the needle in the haystack—the exception, not the rule—For the federal budget, think of tax receipts as “equity financing” and deficits as “debt financing.” When a prudent measure of borrowing is used to supplement tax receipts, tax rates can be lower than they would have to be to “balance the budget.” That's a growth-friendly policy.Because borrowing permits tax rates to be lower, private sector business-builders have more after-tax resources to fund their ideas for better hot dog stands, day-care centers, plasma televisions, bullet-proof vests, video games, alternative-fuel auto engines, and anti-gravity machines. (Did I leave anything out?) In other words, they have more financial resources to create new products, new services, new jobs—and new tax receipts from all those for our government. That, by the way, is how we can “increase taxes” without increasing tax rates. It is happening as we speak, and the short way to say it is “economic growth.”

[Starr]

this is total baloney I will come back and explain when I have time - your assumptions that the govt is anything like a business is your first error I will deal with

[KYRealEstateGuy]

Very nice observation. I sense a touch of frustration, which I share. Your thought is well written and articulate. Hopefully many people read this.In my humble opinion, "fiscal responsibility" should be defined as the immediate deconstruction of the obese bureaucracy and the minimization of the gab b/w the rich and poor. Such a reality could be achieved in several ways. A few suggestions could be:1. Flat Tax2. Term limits for all legislators3. prohibition of lobbyists4. many, many moreBut hey, what do I know? I'm not running this country. The oligarchs are.

[DJR]

Fiscal responsibility is an election year term; it is the only time it is talked about with any type of sincerity. The problem is: there is NO type of fiscal responsibility by any government officials whatsoever. Neither Democrat or Republican - they just spend it - FAST. Apparently, they do not have to balance anything, like us little people do. If we ran our businesses and personal finances like the government does - everyone would be BROKE. End of story.

[sweetbaby]

State and local government are required to balance their budgets (meaning expenses can not exceed revenue). While debt can be taken on, the public must be informed how that debt will be paid off and serviced. These requirements should be no different for the Federal Government. Tax revenue needs to be set at a level that is fair, promotes growth & investment, and can be afforded by the taxpayers. Government needs to control spending. Right now the national debt is at 9 trillion and growing. Sooner or later that is going to have to be paid for. We have got to get a handle on it now, or its going to bite us.

[kiernan223]

lolHonestly, I think they are referring to increasing taxes on the wealthy. Cutting federal spending...well...that's laughable. Never in a million years would the yahoos in congress cut spending. Their whole lot in life is to find new things for the federal government to spend money on.Can you see a congressman going home to his constituents and saying, "I've cut spending. Now we are getting x dollars less from the government to spend on the health and well being of catfish down at the local fishing hole."