May 3, 2011
From the you don't have to be a genius file …
by Dennis Johnson
David Graeber, the author of our forthcoming book about the economy, Debt: The First 5,000 Years, takes issue in a Daily News commentary with the way politicians talk about debt, which is why we wanted him to write a book on the subject. To wit:
We have to live within our means. That’s what President Obama repeatedly tells us, echoing a point Republicans have been making for years. Like households, governments must husband our resources and balance our budgets, or future generations will surely pay.
There’s a problem here. The analogy is ridiculous. Government budgets – and the U.S. budget in particular – are absolutely nothing like a household budget.
Graeber, an anthropologist and an anarchist, goes on to delineate some of the differences apparently invisible to economists, including:
- Households can’t levy taxes.
- When households owe money, they owe it to other people. The U.S. debt is owed mainly to ourselves.
- When households owe money to other people, they can’t just print it. The government can.
Of course, as Graeber continues, “There’s every reason to believe politicians know all this — that in private, they’d tend to agree with Dick Cheney‘s famous assessment: ‘Deficits don’t matter.'” Still, he observes, that doesn’t stop them from “telling us that when it comes to their solemn promises to the rest of us — for instance, Social Security and Medicare — they just don’t have the money…”
Below Graeber participates in a teach-in about the banking system at two Bank of America branches in New York City.
BOA Teach-In from marisa holmes on Vimeo.
Dennis Johnson is the founder of MobyLives, and the co-founder and co-publisher of Melville House. Follow him on Twitter at @mobylives