Peter Yastrow's Blog

Democracy and Debt

There is an old saying: A camel is a racehorse designed by a committee. The lesson being that groups of people are not good at working together, and often the results of a group effort are quite dismal. There are thousands of examples of such outcomes. Laws that were written, buildings that were planned, even meals that were cooked- have all been ruined because groups failed. Too many cooks in the kitchen.

The problem we are now seeing across the whole world is stemming from this human shortcoming; we do not work well in groups, committees or assemblies.

There is a huge psychological blind spot that makes these officials continue to vote for more debt, and more spending. This is not just a Democratic flaw, because there are plenty of Republican districts and communities that are in debt. The Republicans are more concerned, because tax policy is the eventual salve that is put on the wounds. These dollars come from Republican voters. But the wounds of over spending are not unique to Democrats.

The reason elected officials overspend is more human nature than lack of discipline. Consider for a minute the “lottery”. Millions of people play the lottery. Some of them even understand that it is a terrible gamble, and that the odds of winning are so infintesimaly small you might as well throw away your dollar, rather than waste the leather on your shoes walking to the store to buy the ticket. But people see the very small price and figure ” it’s almost free ” and they see the huge payoff, and think ” that could change some lives ” and when you rationalize the whole lotto experience down to ” it is almost free to have a chance at a dream” well then you start to see why they sell hundreds of millions of tickets to people.

Now consider the roll of the committee members who have all been elected to serve the people. They review all sorts of developments and projects. The cost of these wondeful new facilities and projects is infentessimally small to each citizen, just a few extra dollars. Yet the payoff will be a new wonderful civic achievement. It is almost impossible to think through such decisions and not always vote for more. ” it’s just a few dollars more…and look at all of the good we will be doing”.

The alternative would be a group of fussy old do nothings saying “no” “NO” ” NO ” to every new public works project because they re trying to save a few dollars. A few dollars here, a few dollars there, and soon we ‘ve saved SOME dollars.. yee hah !

Seems pretty foolish putting a group of men and women together to decide how to spend other people’s money. Money that has not even been earned yet! Let alone taxed and collected. But that very foolish act is happening everywhere, all over the country, all over Europe. Illinois to Ireland, they’ve all fallen into the same trap. Took on too much debt, couldn’t say NO. Each decision taken independently seems so right. But the cummulative effect of these groups spending our money will eventually be the very act that ends the United States, and most likely the Euro.

Know your weaknesses.

peter

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