"The central tenet in Ted Rall’s latest column seems to be “consumers don’t live within their means, so why should government be forced to?” In making his argument, Rall exposes the vastness of his economic illiteracy. But then, to be a Marxist that’s a prerequisite.
Rall insinuates that our economy would collapse if people were to live within their means. That’s absurd, because most American consumers are pre-wired to spend up to the point they can get in real trouble anyway. In other words, people have a tendency to spend however much disposable income it is they have to dispose of. For example, I paid off all my outstanding debts – home, tractor, motorcycle – about five years ago, which freed up more than $1,000 a month pretty much at one fell swoop. What I noticed – unfortunately – is that the amount I saved per month did not increase by $1,000. Rather, I went on a liberated spending binge that lasted two years, upgrading this and that. The point is, just because you aren’t in hock to the eyeballs doesn’t mean you’re going to help tank the economy by stuffing all your excess cash into a mattress or coffee can. You’ll still spend plenty of money.
The idea that it’s still possible for responsible people to pursue an appropriate mix of saving and spending never enters Rall’s mind either, because he’s off in his usual conspiracy-filled world where the capitalo-fascists eagerly exploit the helpless masses. Rall’s answer to debt reduction? More socialist fantasy: income redistribution, otherwise known as “let’s just tax the rich some more”, and the even more aggressive (and economically ludicrous) “let’s pay everyone the same wage”.
The only thing Rall gets right here is to assert that America has a debt problem. However, it’s not because of an exploitative capitalist system maneuvering us into untenable positions, but because consumers (the individual) and the collective (government) have lost all semblance of fiscal discipline.
One possible suggestion in helping people curb their mounting debts is for government to actually practice the economic austerity that Obama seems to be preaching at the moment, thereby encouraging responsible stewardship of personal debt. After all, “government” is not some abstract entity, but a collection of individuals, whom we (supposedly) still look to for leadership. And it would help if that leadership would lead somewhere besides off the edge of the financial cliff."