2013-10-14

The Country Is Not A Household - US Budget Edition

I have discussed elsewhere the shortcomings of comparing the country to a household in the context of immigration. But the issue of immigration is not the only one for which household comparisons are a bad analogy. Of recent interest is the controversy over the US budget and various debt ceilings.

In this case, it is most often conservatives and libertarians making the case for how the US budget could never look the way it looks if it were forced to adhere to the rules of a household. I sympathize with them on the budgetary issue; that is to say, I share their belief that eliminating the budget deficit, all government debt, and spending less money in general would be hugely beneficial for the country.

But there's no reason to weaken a fundamentally strong position by cooking up stupid analogies. Households are nothing like governments, so there is no good comparison there. For one thing, households don't issue treasury bonds. For another thing, households are far less pluralistic than governments. For another thing, households are funded through income, whereas governments are funded through either collective donation (if you want to take the pro-government view) or widespread robbery (if you want to take the anti-government view).

At any rate, it's silly to make the point that if the US government were more like your household, you'd have no college money left. Those sorts of points are a banality because governments don't work like households. In fact, neither do businesses. If all these things worked the same way, then we'd just call them all "firms" and opt out of differentiating between them with superficial words like "household" versus "government" versus "business," or with superficial fields of study like "public finance" versus "home economics" versus "industrial organization."

I'm all for gutting the federal government and getting us on the path to fiscal solvency, but let's not be stupid with our analogies.