Government Spending Cuts Don’t Cut, They Shift Costs To US

In other words, the Repubican plan to phase out Medicare would cost the economy seven times as much as it cuts government. In this case the mechanism of democracy works seven times better than doing the same thing on our own. The economy of scale introduced by democracy — We, the People gathering together to watch out for and take care of each other — saves the economy sevenfold on costs. And that is money that would be spent by each of us but now goes just to cover the healthcare costs. This is one more reason why democracies are more prosperous for regular people than other forms of government that leave people on their own against the wealthy and powerful and drive all of the income and wealth to a few at the top.

Budget Cuts Deals Hurt Us And The Economy

When you hear that the “debt-ceiling” deal being negotiated in Washington is going to cut $4 trillion from the government’s budget it doesn’t mean that $4 trillion is is going to be saved and put into the economy, it means the opposite, and worse. It means that $4 trillion in costs will be shifted from the mechanism of democracy and onto our backs, each of us, on our own. And that means that the total costs of accomplishing the same things will go up. And that means each of us will have less to spend in the economy. Think about what that will do to jobs.

• As government health care is cut each of us will take on those costs on our own, and will be paying up to seven times what the same care would have cost.
• As infrastructure maintenance and modernization is cut, our economy will become less competitive, unemployment will increase and our wages and spending power will fall.
• As spending on education is cut, our costs of educating ourselves and our kids will increase. College costs will soar.
• As environmental regulation and enforcement is cut the costs of the resulting health problems and cleanups will increase.
• As enforcement of labor laws is cut, our wages and protections will fall.
• As etc. is cut, the costs of etc. are shifted to each of us, on our own, and the total costs of accomplishing etc. actually increase.

This Is About Democracy

In the bigger picture budget cuts are about shifting away from the mechanism of democracy — where We, the People aggregate and cover these costs in a more effective way — and instead moving costs to each of us on-our-own. And because of the effect of reduced economies-of-scale we then each face a much greater cost-per-person than if we did these things through the mechanism of democracy. This hurts our economy.

Don’t be fooled: this is really about shifting from democracy to a system where we are on our own, up against the wealthy and powerful. This is about shifting from a system where we can all be prosperous to a system where a few have all the wealth and power.

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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