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Some dismal science

Editor’s note: Michael Ackley’s columns may include satire and parody based on current events, and thus mix fact with fiction. He assumes informed readers will be able to tell which is which.

“National debt as a percentage of GDP” – It was more than 40 years ago, in graduate school, that I first encountered this linkage of our debt and deficit with the gross domestic product. A professor was arguing that the debt at that time was no big deal, and a fellow grad student – an economics major – agreed. I still remember his words, and how they rang false even then.

He said, “Every business has its operating debt.”

The left still argues that the national debt is just like operating debt in the world of commerce and that as long as it doesn’t become too big a chunk of the GDP, everything will be swell. And in their view, it still isn’t too big.

The gaping hole, the crater, the abyss in their reasoning is that government is not a business, does not run like a business and cannot succeed as a business. Businesses borrow to invest (a word President Obama likes to apply to government overspending). Companies invest in capital equipment, in personnel and in research and development. They either realize profits from that investment – something government never does – or they go out of business – also something government never does.

Businesses must produce goods or services that consumers actually want at a price they will pay. Government produces scads of services, including many that a majority of Americans wouldn’t want – if they knew they existed. And if Americans knew how much they were paying for questionable services, they would be outraged.

Administrations like to pooh-pooh the occasional horrible example of gross waste that shows up in the media. They call these costs “drops in the bucket,” but those drops are symbolic. They are not the tip of the iceberg of waste that protrudes above the water. They are just the tip of the iceberg that shows above the fog above the water.

“National debt as a percentage of GDP” is cover for a fine sounding lie, the kind of prevarication that is a White House specialty. Remember that government spending – with all its waste – is a GDP component. Subtract government waste from private-sector output instead of counting that waste as production. Then you’ll get a truer picture of how debt is a much greater portion of the economy than government would have you believe.

I apologize for burdening you with this “dismal science” lecture. Sometimes frustration with the government fog machine gets the better of me.


Meanwhile, in the Golden State: Every so often, an official in some disaffected California county suggests that his region secede and form a new state. Historically in California, the northern tier of the state’s 58 counties has floated the idea. Del Norte, Siskiyou, Modoc, and maybe Humboldt, Trinity, Shasta and Lassen counties frequently and justifiably feel like they are treated as poor relations in Sacramento.

Now the idea is wafting up from the south state, where Riverside County Supervisor Jeff Stone wants Riverside, Imperial, San Diego, Orange, San Bernardino, Kings, Kern, Fresno, Tulare, Inyo, Madera, Mariposa and Mono counties to secede and form the new state of South California.

Stone thinks this huge swath of territory would be able to secure borders, balance budgets, improve education and grow the economy. His colleague on the Board of Supervisors, Bob Buster, called the idea a “crazy distraction,” but what other kind of distraction would you expect in a crazy state?

Crazy? Did we say crazy? Homosexual state Sen. Mark Leno, D-San Francisco, continues to push legislation requiring public schools to teach children about the achievements of homosexuals. Oddly, Leno does not contemplate a curriculum that includes the achievements of Hitler’s Brown Shirts or the likes of mass murderer John Wayne Gacy.

California Controller John Chiang has released a list of state jobs paying $100,000 or more per year. There are a lot of them.

Citizens now are able to see what bureaucrats mean when they argue the state has to pay top dollar to compete with private industry. (In the interest of full disclosure, I must report that topping the list is Jeff Tedford, at more than $2.3 million. He’s the football coach at Cal, my alma mater.)

Chiang is a Democrat, but if he keeps doing this sort of thing, he’s going to gain tea-party support.