It’s quite popular (mostly on the Right, but not exclusively) to say that the government should be run more like a business. Usually this just means something like “deficits are bad.” But I think the concept should be taken more seriously–and literally. Meanwhile, the budget negotiations currently on the brink of total failure look absolutely nothing like a business–all this talk of where spending can be cut or how revenues can be raised, in fact, seems ridiculously premature.
How Not to Start a Business 101
If I started a company, set my prices, then decided what to manufacture, then determined my costs, then sold my widgets for what turned out to be a loss, I’d look pretty stupid. If I then decided that the way to fix the situation was to keep prices the same and make an inferior product to cut costs, I’d look even worse. Ditto if I raised my prices but still didn’t manage to match my costs. But that’s pretty much what our leaders are talking about doing right now, because taxes are the prices the government charges for the services it provides.
That’s why all this talk of cutting spending or raising taxes makes no sense until we first have the “adult conversation” we were promised. That conversation needs to be about what services the government should and should not provide. That, in our deeply divided country, is the central bone of contention. To assume the answer going into budget talks is simply to prolong an already far too old problem.
Running the country like a business would entail doing the following:
- Decide what services we want the federal government to provide.
- Determine how much it will cost to provide those services.
- Determine the best way to raise an amount of revenue equal to those costs.
It’s true, of course, that the budget is not a tabula rasa, as this formula pretends. But it’s also true that this country desperately needs to have a deliberate conversation about the purpose of government that assumes this sort of tabula rasa as a convenient fiction. In the absence of such a conversation, any deals that are worked out regarding long-term budgetary policies are unlikely to do anything other than make our problems much, much worse.
