Friday, December 4, 2015

Letter to James Lankford

Dear Mr. Lankford,                                              December 4, 2015

I recently heard your comments criticizing "high" government spending and tying it to high levels of unemployment.  I wish I had the information on when and where you delivered this speech.  I heard it on the radio within the last couple of weeks.

Your comments concerned me, because they didn’t seem to reflect a good knowledge of how our economy works.  It is fairly nonsensical to tie unemployment directly to spending of any kind.  Whoever is doing the spending, - be it government, corporation or individual - that entity is directly creating income for another person.

In short, every cent that is spent is received as income by someone else.   Saying that spending is decreasing jobs is like saying that pushing the accelerator on your car makes it slow down.

One can have political opinions about what the government should spend on - roads?  education?  war? healthcare? - but one cannot say that spending is causing unemployment, since the exact opposite is the case.  In fact, we have a word for what happens when spending decreases in our country too much - recession.

One argument I read is that too much government spending may “crowd out” the private sector.  But this is nonsensical when accompanied by complaints of high unemployment.  If that percentage is too high, then there are workers to be had by whoever would like to spend to hire them.  The government is certainly not “hoarding” all available workers. 

The other argument is that businesses are too nervous to hire because of “high” government spending.   This is also nonsense, as businesses tend to spend according to their current level of business (spending on their products by others) and projections about future levels of business.    If the government decreased spending, unemployment would rise and businesses would certainly not gather more confidence, or more business, from this.

I urge you not to dress up political arguments about government spending as economic arguments.

However, I congratulate you on seeking out redundancies in government spending - your so-called “Federal Fumbles” list. Unnecessary spending is a wasted opportunity, which should be redirected towards a more worthy cause.  But I ask that you please remember that the problem is not necessarily the spending - rather, it’s what we spend our money on.   And that is true of the private sector as well.

All spending, public and private, is someone else’s income.

Thanks for your time!

Steven Stark

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