Healthcare, schools, police, tax breaks: which would you keep, slash, or cut? The axe has to swing, so where, if you were the lumberjack, would you aim it? It's the central, polarizing question in this age of austerity. Or is it? Maybe relying on cuts to reboot prosperity is a bit like starting a diet to treat Alzheimer's: probably not going to work.
Consider an allegory: a household racking up debt not just because they have easy credit, but because they're a dysfunctional family to begin with. Meet the new Joneses: they're a little less Cleaver and little more Soprano. Dad Jones is the CEO of Toxico, a major, blue-chip energy corporation. He's an imperious millionaire, but he's stingier than Scrooge McDuck. Though he rakes it in, he flat-out refuses to contribute much, if anything, towards basic household costs--and when the family sets up rules to make him, he quickly finds loopholes. In fact, last year, instead of contributing to the household purse, he managed to find a way get a net contribution from it.
Then there's Grandma Jones. She's not elderly by today's standards, and she's got plenty of years ahead of her. But even now, she demands nothing but the best of care, even when she might not need it. Worse, she won't hear of taking out of her own retirement account to finance it.
The youngest boy in the family, Mike "The Phenomenon" Jones, is livin' large — but those bright-orange pecs, venti-soy-latte-mochacinnos, and mass-designer duds cost money, a lot more money than Mike earns. When Mike's not busy with GTL, he's likely to be found partying, playing Zynga or online poker, or watching other people GTL.
Not-so-hotshot balding fortysomething twins Dick and Lloyd Jones are the family's money managers. Or, more accurately, mismanagers. Dick has a habit of making head-slappingly bad bets — in fact, just last year, he made a bet so groan-inducingly bad, Dad had to ask the neighbors to help bail him out. Lloyd's the very opposite: he makes great bets, but they're zero-sum wagers against the family's prosperity, that create little or no net shared gain. Lloyd (much to everyone's dismay) once made a bet during hurricane season that the family's roof would blow off. And last week, given their rather dire situation, Lloyd made a bet that the Jones family might just go bankrupt. Hence, the family's investments tend to work, at worst, against them — or at least not for them.
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