The last few weeks have seen some very refreshing, blunt talk about the differences between discretionary and essential spending on the Falls Church City Council. The extension of that discourse to broader issues, such as the support of public education, can also be highly instructive in the general conversation about rational economic policy planning with applications ranging from the local to global.
In particular, what is most often lost in debates on economic policy is this critical distinction between the discretionary and the non-discretionary. Or, in other words, between that which is essential for the well-being of a society, and that which is merely fluff, not really needed at all.
Economists and other policy makers are having a hard time these days interpreting the economic signals in the U.S. about the direction of the national economy, and this is due in large part to their failure to embrace this distinction. No one is pushing harder for the obfuscation of all this than the peddlers of all things non-essential.
So, in the view of those failing to grasp this distinction, there is no difference between revenue generated by a Las Vegas casino and that generated by a food supplier, for example. It’s all money, it all involves hiring people to work the business, and so forth. But this error breaks down very quickly when applied to the overall economy.
For one thing, when there is a substantial downsizing of the economy, such as has occurred and is impacting mostly middle class incomes, the distinction becomes more acute, as consumers give up their leisure or discretionary spending in favor of making sure there is enough to feed and clothe the kids.
To try to mitigate this factor, moguls of the entertainment and other non-essential industries beef up their marketing efforts and try to persuade their customer base that spending on non-essentials provides value that is greater than meat and potatoes.
But try as they might, guess who loses? Their siren calls to squander more and more scarce funds falls on fewer and fewer ears, even as the downsizing of their operations lead to higher unemployment.
Now, the effort to mask the effects of the ongoing post-2008 economic crisis with employment numbers that ignore distinctions between gainful full time jobs and those that are part-time and without benefits is only making things worse.
In local communities, tough decisions by public officials must sort out the differences between non-essential and essential services. Someone will always insist that whatever pet project they want to fund is essential. But wiser heads must prevail. There are few things really essential to a local economy, and in addition to public safety, they are pretty well limited to quality education.
Public education is an investment, not a cost, as it is the cornerstone of a realistic push to build a better future out of whatever we have now. It’s the only aspect of our economy that is truly indispensable.