Government "spending" vs. "recirculation"
There is a very good book called The Gardens of Democracy (Eric Liu and Nick Hanauer) that has a lot to say about economics. The economy is a garden rather than a machine. Cooperation is as important as competition. The government has a key role in a properly functioning economy, etc. The book essentially says it all for me.
One of the powerful points they make, among very many, is that a lot of people have a misconception of government activity as merely "spending." There is this idea that government spending somehow vacuums money away into a black hole. The Republicans encourage this view. They want people to think zero sum, as if the wealth of the country is like a pie. They want people to think government is taking away a huge chunk of the pie, either to redistribute it to the undeserving or just to waste it. That is a central theme in the Republican economic mythos and a keystone in their argument demonizing the government. Unfortunately, the Republicans' simplistic view (and self-serving in the case of the Republican wealthy) is wrong and destructive.
In the book, the discussion starts on p. 103 at the bottom. Italics all the book authors'.
...there is an even deeper misconception at work here. Conventional Machinebrain wisdom conceives of and describes government activity as "spending."...The association we have with the word spending is that when government does it, our money is gone. The unconscious assumption is that our tax dollars are swept into piles and burned or poured down a drain....The government, like a car engine, uses up money like fuel. Of course, this ignores the fundamental reality of the role of money in an economic ecosystem as essential lifeblood that circulates throughout it again and again.
In this Gardenbrain sense, government does not spend money; it circulates it. It does not redistribute money; it recirculates it. Social Security is the largest line item of government "spending" in the budget. But Social Security is simply a collateralized savings account. Understood as circulation, Social Security's main benefit isn't to keep the elderly from living in cardboard boxes, although that is a fine thing, but to ensure that they continue as dynamic consumers in our economy. Social Security circulates money back to the citizens who contributed to it in the first place, and is then circulated again by them, generating increased economic activity that allows others to be paid, to contribute to Social Security and then to receive those benefits in the future, in an endless and essential positive feedback loop that sustains and expands our economy. If Social Security truly were "spending," then our economy would be getting smaller and our nation's net worth would be shrinking as a consequence of its growth.
...Even the lowly, lazy, useless bureaucrat is some small business's best customer.
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