Child America

A majority of Americans wax wroth, economists have long noted, when informed of the financial excesses of Big Government in Washington. Tea Partiers and others rail against deficits and nag their representatives to refuse to raise the debt ceiling and thus force Democrats to make an at least halfhearted attempt to balance the budget.

But when these same citizens are asked if they would support cutbacks in the very entitlement programs that cause most of the deficit – Social Security and Medicare/Medicaid/healthcare – they hasten to demur. Deficits must be cut, they insist, without touching the expenditures that have created those deficits in the first place.

In psychology this is known as “magical thinking” and it characterizes how very young children see the world. Little kids believe that they can have their cake, eat it, share it, waste it, and still have plenty left over for tomorrow.

Young children don’t understand, and aren’t expected to understand, that when a resource is used up it’s gone, and will only reappear when sufficient effort and energy is invested in replacing it.

The credit splurge of the past decade, by both government and the public, supported the childish illusion that money could be spent and more could be easily acquired in a never-ending cycle of borrowing against a future that people believed would never arrive. Then the bubble burst, the market crashed, and we borrowed trillion after trillion to “pay” for that fantasy.

The real world has a way of teaching children and adults alike that the failure to accurately perceive reality can be very expensive. Bankruptcies and credit defaults are the economy’s way of telling us that we should at least act like adults.

Now President Obama is telling us that if we tax those bad rich people enough, the problem will go away and we can go on spending as we please. Making money is bad, he says, and making lots of money is even worse. When companies succeed they should have “excess profits” taken away, and when they fail, well, tough on ‘em.

He’s wrong. Statistics show that even if we tax the “rich” at 100% we will still have huge and unsustainable deficits. And all rich Americans will live in Monaco.

Paul Ryan’s budget plan may not be perfect but at least it’s honest. It let’s us know that real confrontation with the debt problem will involve some suffering and sacrifice.

At least he is aware that if we want to fix the problem we must fix the problem. We have to clarify and simplify the tax system and create simple and reality-based health care. The tax preparation health and care monopolies will be displeased. After we get rid of the waste and inefficiency, we will likely have to raise taxes in a fair, comprehensive and honest manner; perhaps a consumption tax, perhaps a flat tax. We will have to look the greed-devil in the eye and tell him we’re not going to lay down.

Grown ups in Greece and Ireland are hypnotized by magical thinking; they’ve fed off the Euro for a decade or so, retired early, became property millionaires. Then the bust came and the magical carpet was yanked from beneath them. Now they’re burning down the stores where they can no longer afford to shop. Sometimes a disappointed child throws tantrums.

In the end, children and grown-ups alike feel more secure when they realize they are being told the truth. Anyone who tells you that addressing our budgetary mess will be pain-free thinks you’re too dumb to tell whatever-it-is from shinola. They want to you remain a child and continue to indulge in your fantasies. And vote for them, so they can become rich and famous.

Neither magical thinking or magic will get us out of this mess, so let’s elect people who will treat us like grown-ups and tell us the truth and help us get about the difficult business of making the world a better place for ourselves, and for those who appropriately believe in magic, our children.