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If Government "Acted Like a Business" It Would Reject Today's Deficit Madness

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The pro-corporate, anti-majority political class is sustaining itself with a lot of self-serving myths these days. Guess you need to do that when you're dismantling the social contract. In the closed society that is Insider Washington, rites and mythologies are used to promote the otherwise-indefensible: the cruel irrationality of Austerity Economics.

Dean Baker, for example, points out that Democrats must "prove their manhood" by cutting a treasured and valuable program like Social Security. (Funny: Republicans are never asked to do the same.) This initiatory rite is something like a Mafioso's "earning his bones" as a "made man" by "whacking" somebody -- in this case, his own grandmother.

Here's another myth: Government must "act more like a business" through spending cuts. Is that really what a smart business person would do? What savvy executive would tell his managers to cut spending by a certain percentage over the next 10 years when she or he doesn't even know what the sales figures will look like?

From investment to "thinking outside the box," here are six ways Washington's austerity madness is un- businesslike:

1. Smart executives invest.

The first error our leaders make is in thinking about government spending in a zero-sum way. In their minds, money goes out and is lost forever. The concept they're missing is investment.  Business leaders, on the other hand, know all about investment. They know that sometimes you have to spend a dollar to get back two. They reject wasteful spending, but they embrace investment.

A government's smartest investment is its people. Investment in education pays off: A more educated workforce earns more money, which means more revenue for our government "business." And a well-paid middle class buys more goods and services, which means more jobs.

Government spending can also be an investment in jobs, especially in times like these. And since money spent on construction projects or education will create more jobs per dollar than money spent on defense, business-like political leaders would promote that kind of spending.

When it comes to borrowing, business executives are rarely in the prized position our government now enjoys: Investors are essentially paying the US government to let them lend it money, because it seems like the safest place to put it these days. If our government was really run like a business, it would be borrowing and investing in future economic growth. The returns would be excellent, and it would even make money on the loans.

2. Smart executives don't cheat their customers.

Both sides of the negotiating table are offering the "chained CPI" as a technique for cutting Social Security. This would reduce benefits for people who have paid into the Social Security system their entire lives.

Successful businesses don't cheat their customers like that. It's a strategy that may lead to short-term gain, but it will pollute the brand so badly that the enterprise will soon go out of business.

Now, most of today's extremist Republicans have essentially joined government in order to destroy it, so this is presumably fine with them. But why would a Democrat like the President insist on proposing these cuts? It pollutes Brand Democrat as well as Brand Government.

The lack of stronger pushback from his own party is equally baffling. No business executive would stand for it.

3. Smart executives listen to expert advice.

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Host of 'The Breakdown,' Writer, and Senior Fellow, Campaign for America's Future

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