Debts and Deficits: A Jane Austen Story

August 2nd, 2011 // 10:54 am @ Oliver DeMille

Chapter I: A Truth Universally Acknowledged

It is a truth universally acknowledged, that when a nation treats business badly, corporations with extra capital take it abroad and the home nation faces job losses and economic challenges.

Such nations experience widespread anxiety about their future, problems feel overwhelming, and the leaders seem unable—or unwilling—to find and implement effective solutions.

But the answers are actually quite clear, if only the people and their leaders have the courage to apply them.

When great nations struggling with debt, deficits, sluggish growth and high unemployment cultivate the most friendly global environment for business investment and economic growth, their economy booms and flourishes.

The current debate in Washington about debts, deficits, taxes, spending cuts and political parties is a lot like a Jane Austen novel.

There are attractive, well-spoken charmers who turn out to be villains, shockingly inappropriate self-promoters, and well-meaning individuals of influence whose personal flaws and arrogance cause problems around them—even as they are entertaining to the audience.

There are also regular, good people who stand to gain or lose a lot.

And, above all, there is the romance of important things happening, things which touch us on a level deeper than the intellect.

The most striking similarity, however, may be that the first paragraph of the story—and even the title—contain the whole answer.

Readers who carefully ponder the thoughts of the first paragraph of certain Austen novels get a preview and veritable overview of the whole plot to come.

In Pride and Prejudice, for example, the reader discovers in the first several sentences that the daughters of a modestly-situated family are in need of marrying well and that their prospects have just improved due to the proximity of a promising young man.

The plot is pretty much determined at this point.

The girl will get the boy, after some courtship, disappointments, major crisis, and so on.

And since we are told right off the bat that more than one girl needs to get a boy, we can be sure that at least some of them will succeed.

The title helps too: we can be fairly certain that the disappointments and crises will have something to do with pride, prejudice and misunderstandings, and that when these flaws are overcome the crises will be over and the story will find resolution.

The same is true of our current national narrative, which could be entitled Debts and Deficits.

Chapter II: A Rocket Science Conclusion

It really isn’t rocket science to conclude, even without going into detail, that deficits will be solved by spending less than we bring in, and that debt will be overcome either by not borrowing too much in the first place or by growing the economy to bring in surpluses that pay off the obligated amount.

Of course, it is in the details, dialogues, relationships and minutiae that the real fun is found.

Who will succeed?

Who will show their true colors?

Which characters will face reality and change?

How will the audience respond?

Still, whatever the particulars, the plot is generally known from the beginning.

Yes, it is within the realm of possibility that the whole thing could turn strangely off course.

The story could progress, develop and build toward crescendo only to suddenly go in some strange and totally unexpected direction, but only by refusing to overcome the debts and deficits.

These are what the story is about, after all, so dealing with them is vital—and eventually this is what will happen.

Americans want two things which seem to be in conflict with each other.

Chapter III: Greedy Americans

First, they want freedom, opportunity, prosperity, low taxes and non-intrusive government, and, second, they want a lot of government programs that provide significant benefits which they have become accustomed to enjoying—from roads and schools to trash collection, national defense, personal protection, prescription drug benefits, retirement checks, and much more.

At first glance, it seems impossible to simultaneously increase both.

Either government spending must go down or taxes must go up.

This is the crisis.

Darcy wants massive new programs that will require huge government spending increases, while Lizzie wants tax cuts and decreases in government red tape.

You can imagine the letters they would exchange on the subject.

As the disagreements escalate, both sides eventually resort to name calling: “inferior connections,” “lack of gentlemanly behavior,” “tax cuts for the rich,” “socialists,” “party of no,” “the President has no plan,” etc.

Still, the plot is basically set: overcome your pride or you won’t get what you want, realize that your prejudice has caused you to misread people and their real character, spend less than the nation takes in or see fiscal problems exponentially increase, become attractive to business investment and hiring or watch the economy and unemployment continue to sputter.

Mrs. Bennett’s behavior is shocking; no wonder Darcy feels pride in comparison.

The corporate tax rates in the United States are double those of our top competitors; no wonder jobs are scarce in the United States.

Sometimes the context tells the whole story.

David Cote said on Meet the Press:

“Right now the problem we’ve got is uncertainty of demand. Businesses don’t add until they’re sure that somebody is going to want to actually buy something. To that we’ve added uncertainty of regulation, and when you combine those two it just causes businesses to say, ‘I’m going to wait a little bit.’ And I always find it interesting when I hear government say, ‘We need to create jobs…’ Actually, government doesn’t create jobs. Government can create an environment where jobs can be created, and I think it’s important to start to distinguish between the two.”

Ohio Governor John Kasich added, in the same conversation:

“In my state, where we faced an $8 billion deficit, we wiped it out and eliminated it, and here’s the interesting thing: we have just been taken off of negative watch [credit rating]. In the middle of this we also have jumped—according to CNBC—11 places in terms of business friendly [states]. We’ve been able to cut taxes, improve and reform government, and you know why? We looked it square in the eye because Ohio was dying, and we are beginning to really become business friendly. That is what they’re not doing here in D.C. right now.”

Ohio faced a massive deficit, and overcame it by becoming business friendly, by attracting business growth.

As a result, they were able to cut taxes and drastically improve their economy.

But Washington has yet to make such changes.

As Senator Marco Rubio said on Face the Nation,

“If you talk to job creators, not politicians, not presidents, they will tell you…they’re looking for some regulatory reform….because they think these regulations that are being imposed make America a more unfriendly place to do business. When people tell you, ‘communist China is a better place to do business than America,’ you know you’re in trouble.”

As Jack Lew, Director of the White House Office of Budget and Management said on This Week With Christiane Amanpour,

“It’s not enough for us just to do what we have to do. We have to do as much as we possibly can to deal with the fiscal challenges.”

Chapter IV: A Strategy for Washington

The strategy for Washington is clear.

Become business friendly.

Cut spending to get our fiscal house in order.

Cut the corporate tax rate to make America’s business environment competitive with other nations.

That’s the only jobs program Washington needs.

I recently heard a radio talk-show discussion that suggested the United States can’t make the needed changes without a huge crisis.

Unless we engage a massive military conflict, one commentator argued, the American people will never be willing to fund the level of government spending needed to get our economy turned around.

This kind of thinking is entirely wrong.

Yes, Darcy must have become even more attached to Lizzie by facing the Wickham crisis and bringing it to resolution, but every indication is that he would have fully pursued her anyway—and everyone would have been better off without the crisis.

We may need crisis to get us to do the right thing with our economy, but we really should just do it without waiting for calamity.

The Great Recession, continued unemployment and our sluggish economy are crisis enough.

And, again, the solutions are clear.

They were inherent in the plot before the economy ever started struggling.

When you spend more than you have, stop.

When you need more than you have, become attractive to business opportunity.

Pay your bills.

Don’t default.

Don’t keep increasing the debt without reducing spending and following a valid plan for fiscal prosperity.

Make hard choices because they are the right thing to do, regardless of what the Lady Catherines or Mr. Collinses of the world will think.

There is only one way this can end: We have to get our fiscal house in order.

Chapter V: Happily Ever After or…Not So Much

Image Source: Pride and Prejudice, A&E. 1995.

We can do this right now, with celebrations and smiles, or we can refuse to make the right choices and let world markets force our government spending, regulation and excesses to change.

But change they will.

We can marry Darcy or Wickham, but marry we shall.

That ending was foreshadowed when the first page was written.

The story of the United States right now is Debt and Deficits, and there can only be one ultimate conclusion.

Debts and deficits are real, we have them, and we must overcome them—by choice or natural consequences.

How much we suffer between now and the last page depends on us.

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Oliver DeMille is a co-founder of the Center for Social Leadership, and a co-creator of Thomas Jefferson Education.