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| Joe Bakewell. |
A DIFFERENT ESSAY.
Much of the reasoning
here is new to my readers. I invite questions and will answer as best I can.
Full disclosure: I have not backed away from my conviction
that the corruption of special interests’ money is our nation’s overriding problem.
It prevents us from even mentioning our other serious problems.
There is in management circles a concept called ROIC; Return
on Invested Capital. There are two units to consider; dollars and time. Feeling
good doesn’t count.
So, for example, one can invest in ‘inflation protected
treasury bonds’ for a return of 2% per year. This becomes a benchmark. Why
would anyone invest in something with even a small amount of risk for the same
return? Clearly, higher risk should bring a higher return.
Another concept: What are the limits on government spending,
wherein every new expenditure adds to our debt? It depends on whom you ask.
Our politicians in DC argue, like many teenagers, that we
can’t afford to not do whatever it is that they are proposing.
Some economists are providing new thinking to help them
along, going so far as to state that a government can spend as much money as it
can borrow or print. It’s called ‘Modern Monetary Theory’.
I dismiss ‘printing’. Too many countries, including our own,
have tried this and failed. In revolutionary times, our Continental Congress
printed ‘Continentals’ to pay for military expenses. Almost immediately, an
expression emerged: “It’s not worth a Continental.”
Assume that for at least the foreseeable future, we can
borrow as needed to fund government spending. We are still obliged to pay
interest on our total debt. The debt exceeds 100% of our GDP (Gross Domestic
Product). Currently, we pay 3.1% which equals 8.5% of our budget.
A SOCIAL INVESTMENT.
As I look at my grandchildren and great grandchildren, I see
the makings of a growing divide in our society. These children (some are mature
adults) are already markedly ahead of their peers. At the other end are black
children who will show up for kindergarten, or first grade, with a vocabulary
1/5th that of their white contemporaries. This is unfair. It cries
out for help. The principal cause for this situation is that they come from
single-parent homes, dependent on welfare. Blaming the parents is just plain
stupid and no justification for allowing the situation to continue.
I advocate early intervention in the home, engaging the
children and parent. We have compulsory education K-12. Why not compulsory
early intervention? The methods are negotiable, but the results are not and can
be measured.
So, what happened to ROIC? It’s there, and can be measured
in dollars. The negative results are
already being recorded so differences can be quantified and cost savings
calculated. Here are a few. Others will
see more.
Less multi-generational welfare; less crime (the direct
costs of crime, police, and incarceration).
Other benefits measurable in dollars: Tax dollars from
now-employable people; plus, the costs of avoiding crime--barbed wire, guards
etc. (A casual drive through a high-crime area is revealing.) Improving real
estate values, expanding our workforce and raising skill levels.
OTHER GOVERNMENT
INVESTMENTS.
There is a number that most people never think
about—productivity. It measures how much our country produces in goods and
services vs. what we spend in resources to do so. Improvements in this number
depend on investments, both private and public. It correlates with improvements
in our quality of life.
One thinks first of infrastructure, built and maintained by
government. Anything that allows us to transport goods and people more
efficiently qualifies provided the benefit exceeds the cost.
Government can improve the size and skill levels of our
workforce. Think of what a sensible immigration policy might accomplish. Here,
I would add a proviso. There’s a tendency to confuse humanitarian aid with
immigration. Americans are a generous people. We should provide aid and
sanctuary inside our own borders for desperate people fleeing hopeless
conditions. Some limit would need to be set—perhaps by funding it with private
donations plus matching government funds.
Joe Bakewell.
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