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Spending vs. Saving? Viewers respond to John's comments...
Oct 29, 2013
***Editor’s Note: Last weekend’s Mailbag segment from John Phipps generated lots of response. We’ll begin this post with a transcript of John’s comments, followed by viewer feedback:
FARM REPORT MAILBAG:
Time now for our weekly look inside the Farm Report Mailbag…Kevin Draves in Midland, Michigan raises a point of clarification. "GDP is not the profit of our country but the spending of our country including government spending. What scares me the most about $17 trillion of debt is the interest."
Kevin, I went back and checked and I did not use the word "profit". I talked about GDP being the measure of our total income. But your comment does raise an important point. Right now the term spending carries a negative political charge to it. Saving is better than spending. Government spending is the worst of all. Meanwhile income is a totally good thing and should be maximized and in some minds protected from unnecessary taxation. Both of these positions seem reasonable until you look at the connection. One person’s spending is another person’s income. People who advocate that Americans or our government spend too much on this product or that service should try to figure out where their income comes from. You paycheck, for example is the evidence your employer spent money on your labor. While it may have been more virtuous for him to save instead of spend, it would not be good for your finances.
#1: John, your comments equated government spending and private spending as if they were the same thing. When an employer pays an employee the employee is paid to produce something which adds value to the economy, this is what produces the profit. When the government spends money, they take it from the economy and re-distributes it to people and causes as the politicians decides, usually on causes I do not support. This is destructive to a free-enterprise system. In other words, government does not have profit; it just has income and outgo. As the government grows bigger it must employ more people to do its bidding. These people become dependent on the government, ensuring future votes and support, but more importantly, depriving the private sector of productive workers who would otherwise be producing even more value instead of living off of the private sectors productivity. You asked your viewers to take stock of where their money comes from, insinuating that most peoples’ incomes are at least partially derived directly or indirectly from government sources. This question deals only with short-sighted, self- interest and not with principle. If the principle is right, it is good and will produce much better fruit than what a government politician or bureaucrat could even imagine. The communist/socialist/progressive always appeals to peoples’ short sighted, self interest in order to convince them to yield their sovereignty, but if we are to remain free, we must act on principle, take back our rights, power, and responsibilities. Sincerely - John Fox
#2: Hi John, you are right about cutting spending but the questions are difficult to answer. Which entitlements or projects need to be reduced or cut out completely? Whose wage are we cutting or eliminating? Many federal agencies are essential to the operation of our nation. The answer is to balance the budget (when we have one!) the same way we balance our budgets at the state, county, and city levels, and in our homes. We are not going to turn this around quickly but we must start somewhere. The problems are numerous. We have seen deficit spending for years (except for the last half of the Clinton administration). The number of people receiving handouts out-numbers the number of people providing the handouts. Thanks for the work you do on US Farm Report. I always watch and enjoy it immensely. William Stromberger - Edwall, WA
#3: I am very close to not watching your show anymore. One more smug political speech from Phipps and I am done. Jim Siepman
#4: Good Morning folks at USFR, I just wanted to write with a quick word of thanks. Career and knowledge-wise I'm about the farthest thing from a farmer, but I'm an early bird and when I'm up with my coffee at 5AM on Saturday mornings, you're one of the better shows on TV so I start my weekend with you and gain some appreciation for the Ag that's all around me. I wanted to pass along my gratitude to Mr. Phipps' commentary at the end of each show, which seems to be about economics more than anything else. It's always economically astute, sensibly delivered, and usually gives me a perspective that I hadn't considered before and I value that. Keep up your good work! With Gratitude…Ryan Wheeler - Anamosa, IA