Posts Tagged ‘national debt’

Financing Good Deeds

Wednesday, May 8th, 2013

Here is the question. How can we as a society in the United States maximize the good things we are able to do with our wealth? One of course starts to think about the efficiency of public vs. private support of good deeds, but let’s set the efficiency issue aside for now and just deal with the main question: how can we maximize good deed creation? That is, how many good deeds can we afford?

I would propose that somewhere there is a mathematical response to this question. That is, I believe if we all create wealth without regard to worthy causes, that would not maximize the good things we are able to do. But the converse is also true – i.e., if we use all our wealth to do good deeds we will soon find we have no wealth, and realize that investment of our wealth is necessary to further grow this wealth and thus our ability to do more good things. The optimum point lies somewhere in the middle.

This presupposes a graph, a curve, with wealth creation on the x axis and good deeds on the y axis.

Forgive the standard bell-type curve. We don’t really know what the curve would look like, because no one has yet done the work. But isn’t this what our present day political discussion is all about? Some people think a lot more wealth can be taken out of the economy and used for purposes that do not create further wealth. Others think we are near that inflection point where taking more dollars out of investment and using them for consumption – i.e., doing good deeds – will push us over the top, like a roller coaster, and start us on the downward path toward less wealth and thus less ability to do good things.

In our society today it is unfashionable to do math. But maybe we need to do these calculations.

THE GREAT GAME REDUX

Thursday, November 29th, 2012

Consider this possibility. The President is not concerned about the next four years and his legacy arising therefrom. His time frame is much longer. Let’s say 24 years. His legacy will take that much time to develop. All he has to do is keep his voting coalition together. If future candidates can count on 95% of the black vote and majorities among women and other minority groups, they will be elected. President Obama knows how to do this. He is very good at it. Electing future Presidents with this strategy will bring him immense power whether he is President or not.

Given the above, what is his short term goal? To keep his voters’ support. Over a long time. Does addressing the Fiscal Cliff help in this goal? Much better to go over the cliff and blame it on the other party, his successful strategy the previous four years. People will feel the pain of poor economic policy, but they will blame it on the Republicans. That keeps the mid-term election in play, and allows him to start – now – shooting for 2016.

Further, going over the cliff increases tax revenue greatly by taxing the middle class. And whose fault is it? Not his, under this scenario. The fault will lie with the Republicans. And a lot more tax revenue is needed if government spending is to stay at the President’s preferred 24% of GDP. Or maybe higher.

Right now it seems the Republicans are executing his play book. Far better to pass the “millionaire” tax in the house, and then check to the raiser.

Jim Hirshfield