Posted by Rojas @ 3:59 pm on January 29th 2009

Bite the bullet

Jim Manzi’s comments today at The Atlantic business blog constitute the best single post I’ve read so far this year. You’ll want to read the whole thing–the directness is immensely refreshing and the anecdotal example he uses is perfect. You’ll like the “punchline” as well.

But the hard kernel of truth at the center of his essay is best of all. Emphasis mine:

American consumers are awash in debt, drowning in it. This is the fundamental issue with the stimulus proposal. We’re trying to borrow our way out of debt. Unfortunately, we need a recession. That is, consumption must decline because for some time we have been consuming more than we produce or have reasonable prospects of producing.

I have been sort of dancing around Manzi’s conclusion for a while now. I think it’s time to stop dancing.

The massive media and governmental panic over the recession is the product of the public’s mindset that short-term pain must be avoided at all costs. We are unwilling to defer pleasure under any set of circumstances, and the government perfectly mirrors the polity in its unwillingness to live within its means. Similarly, we resist any form of direct accountability for the consequences of our own actions; there is always “corporate greed” or “predatory lending” to blame for our own wretched, shortsighted decisions.

Manzi gets to the heart of the matter. The ongoing economic growth which our nation has been experiencing is the product of borrowed money. It is, therefore, illusory. We were borrowing from the future to finance our desires of the moment; now the future has arrived. We were always going to have to pay for our extravagance sooner or later. This recession simply represents the bill coming due.

The stimulus bill–indeed, all efforts to spend our way out of recession, or to eliminate it through tax reduction–represent a simple effort to kick the problem further down the road. These bills, too, will come due, and the pain will be all the greater. As long as we consume more than we produce, we are living on borrowed time. Our options are to produce more or consume less. Period.

For some time now, I have felt myself to be a minority of one where my feelings on emerging events have been concerned. I listen to tales of mortgage defaults without feeling a shred of sympathy for the “victims”, who almost universally locked themselves into deals that they hadn’t the remotest prospect of paying. I recieve robo-calls offering to help me out with my “predatory lenders” (I have no current debt worth mentioning, so I assume these are made at random) and I want to kick the caller in the teeth–and kick those who’d take them up on the offer even harder.

Now as the entire universe joins in chorus in support of some form of government bailout–Republicans, Democrats, and the media alike–I find myself alone again, intent on the idea that this recession is, indeed, necessary to the long-term economic security of the United States. Pain is our body’s way of telling us that our behavior is unsustainable. The proper response to this pain is not to load up on drugs, but to correctly identify and then alter the behavior that caused it.

It seems that Ron Paul is the only man in Washington who shares my views. It’s me, Ron, and Jim Manzi against the world.

7 Comments »

  1. And me. This whole thing almost seems orchestrated to me at this point. When it doesn’t work, and it probably won’t, then what?

    Comment by James — 1/29/2009 @ 8:06 pm

  2. Count me in, too, although if we’re going to do a government bailout, I think there are better and worse ways to do it.

    I think Obama should spread the notion that the patriotic duty of every American is to live within your means. Do everything you like to make those means more extensive, sure, but living beyond them as a chronic way of life–whether you’re an individual or a government–is unsustainable.

    And I should learn to follow my own advice.

    Comment by Talarohk — 1/29/2009 @ 8:54 pm

  3. I think there are a lot of people who think that Ron Paul is the only person in Washington who shares their views. I think that’s why some people are so fanatical about him, despite the fact that he is kind of goofy.

    In my opinion, once again, the libertarians and classical economists have ascertained the appropriate government response to (whatever ‘crisis’ we’re facing today): Nothing.

    Comment by Redland Jack — 1/29/2009 @ 11:24 pm

  4. I agree that we need to contract. We need to live within our means and we need to face up to the fact that this means we will have to scale down our standard of living. If the government is going to get involved, I wish it would provide training/education, extended unemployment benefits, and health care for people who lose their livelihoods during the downturn. Not that I think it’s the government’s responsibility for that but I do believe it would be good for the country and its definitely helps people who need it out.

    Yeah, people might have to move into an apartment or smaller house, they might have to give back their new Shiny™, they have to wear a smaller wardrobe longer. The shock needs to be felt strong enough to make people want to live responsibly, but at the same time it’s pretty inhumane to not care enough to help alleviate some of the pain, especially if its done in a way that can ultimately have a positive economic effect (as the interventions I mentioned above would).

    Comment by Jerrod — 1/29/2009 @ 11:51 pm

  5. My feeling has always been that if people are going to stick their hands in my pocket, then I get to have a say in how they live their lives. If I’m paying for someone else’s health insurance, I get to tell them what to eat and how often to exercise.

    I don’t like for people to suffer, and I know one surefire way for that to happen… they can live their lives like I do.

    Comment by Redland Jack — 1/31/2009 @ 3:24 am

  6. You get that involved in how charities dispurse donations or churches deal with tithes?

    Comment by Jerrod — 1/31/2009 @ 8:46 am

  7. I know the Mormons tend to be very charitable (particularly to other Mormons). However, they take an active interest in why a person needs the charity and act in a paternal matter towards the person receiving the charity. This seems perfectly valid and is probably more helpful to the person receiving the charity, as it helps them to get at the root of the their problem.

    The more personally involved the charitable organization, the better. I think this is why governments are particularly awful at dispensing help to people. The bond between the helper and the helpee is quite weak. ‘Communities’ strike me as a much better way of helping people. Governments destroy communities and weaken the interpersonal ties between people (not necessarily more than superior transportation or something like the Internet, but it is still a very destructive force).

    Comment by Redland Jack — 1/31/2009 @ 5:15 pm

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