Rand Paul, son of Texas libertarian Ron Paul and Republican candidate for Senate in Kentucky, was interviewed for yesterday's New York Times Magazine. When the interviewer cheekily asked whether or not Paul the Father let Paul the Son do whatever he wanted as a child, Rand gave an interesting response: "The kind of funny thing is that there’s a difference between the government and a family. A family can be a complete dictatorship."
It's interesting not only because of the insight provided regarding the apparently authoritarian nature of the Paul household ("you'll read The Fountainhead again and you'll like it!"). Here we find a libertarian actually making a distinction between the nature of a government and the nature of a household. These days, the prevailing economic wisdom on the right seems to hold that government spending should be guided by the good old fashioned principles of household budgeting. The general argument usually goes something like this: "government needs to tighten its belt in these hard times just like all the families and small businesses out there," or that ambitious social programs shouldn't be financed with deficits because "we don't have the money to pay for it." Deficit spending has to be stopped or in relatively short order, or the economy will collapse and we'll all be heating our homes with shovelfuls of greenbacks.
This is a pretty simplistic argument, and the economist L. Randall Wray pretty thoroughly demolishes some of the assumptions behind it in an amusing post at the New Deal 2.0 website. Here's a little taste:
5. Some claim that if the government continues to run deficits, some day the dollar’s value will fall due to inflation; or its value will depreciate relative to foreign currencies. But only a moron would refuse to accept dollars today on the belief that at some unknown date in the hypothetical and distant future their value might be less than today’s value. If you have dollars you don’t want, please send them to me.
But as I've found out after years of arguments at family functions over the idea of running the government like a business, for the most part it doesn't matter how many facts or how much logic you bring to a question like this. That's because most people's positions on economic issues aren't based on objectively demonstrable criteria. They're based mostly on non-economic values and emotions.
I've been reading Richard Hofstadter's classic The Paranoid Style in American Politics lately, and while some of his arguments are dated or flawed, he makes this specific point better than anyone else probably ever has:
Deficit spending is vehemently opposed by great numbers of people in our society who have given no serious thought - indeed are hardly equipped to do so - to the complex questions bearing on its efficacy as an economic device. They oppose it because their personal experience or training in spending, debts, and prudential management leads them to see in deficit spending a shocking repudiation of the moral precepts upon which their lives have been based. As a matter of status politics, deficit spending is an affront to millions who have been raised to live (and in some cases have been forced by circumstances to live) abstemious, thrifty, prudential lives. As a matter of interest politics, deficit spending might work to their advantage; but the moral and psychological effect, which is what they can really understand and feel, is quite otherwise: when society adopts a policy of deficit spending, thrifty small-businessmen, professionals, farmers, and white-collar professionals who have been managing their affairs by the old rules feel that their way of life has been officially and insultingly repudiated.
I'm not sure if there's really anything that can be done about this. As Hofstadter argues, there's probably always going to be a fairly sizable portion of the population for whom this mode of politics is attractive. If anything, as the economy and society seemingly become more complex and people's ability to understand its workings becomes more circumscribed, it's very possible that this general phenomenon will only become even more pronounced than it is now. That's probably not a good thing for left politics or the prospects for democracy generally.