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We The People of USA: Quit blaming the government

 

Imagine a thousand dollar steak.  Kind of like a Kobe beef, but better -- so carefully prepared from the cow to the plate, that it's truly heaven on earth.

Imagine that American companies produce this thousand dollar steak.  There is some demand abroad, so exporting the steak is a possibility.   Now, US demand for the steak determines whether it is exported or not:  If there is low enough US demand, and high enough foreign demand, then exporting the steak will be more profitable than selling locally. Those two scenarios (export or consume in US) have completely different effects on the health of the US economy:

Scenario 1: American buys and eats the steak.  Fed government collects income tax from the US seller.  American buyer has $1000 less to spend on goods, and/or there is less money in the banking system to help the balance sheets.

Scenario 2:  Steak exported, Japanese guy buys and eats it.  Fed government collects income tax from US seller.  American buyer still has $1000 to spend and save.  Fed government gets to collect additional income tax if the American spends on other American goods.

Clearly Scenario 2 is preferable.  We The People consume too many fancy and frivolous things, instead of exporting.  I strongly maintain that excessive consumption is a huge cause of our deficit problems -- maybe even more important than government spending.  European nations have demonstrated it is possible to tax and finance expensive social programs.  European consumers do not blow as much money on Hummers and gas.

We supposedly can't raise taxes because it will destroy our consumer-based economy.  I say the true problem, then, is that the US economy is too reliant on our own consumption.  Scenario 2 shows that by US actors exporting instead of consuming and importing, the government can collect more revenue in the long run.  The trick is that we need to cater to foreign consumers.  We The People need to tighten our belts and continue to produce -- but serve up the luxury goods to someone else for a change.