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     The waters of the Colorado River flow into Lake Mead which provides the water for Hoover Dam.  Hoover Dam generates electricity for most of the domestic usage in Arizona, Nevada, southern California and powers the California Aqueduct which supplies water to the Los Angeles basin.   The dam generates electricity by directing the water of Lake Mead through giant dynamos.   The electricity generated lights the home and turns on the faucets of millions of homes and business in three states. This is a metaphor for the American economic system.

     Translating the elements of this metaphor into actual economic terms goes like this:  (1) the water in Lake Mead is potential or future electricity, (2) the dynamos are the nation’s economic activity – both private and public sectors - and (3) the electricity generated is the means by which individuals and businesses pay their bills.   No water, no electricity, no jobs or customers and no bills paid.  It is just that simple.
     The Tea Party, conservatives of all strips, the Koch brothers, Dick Armey, the U.S. Chamber of Commerce and all the rest of the anti-debt/balance-the- budget-in-a-recession faction want to take all the electricity generated by Hoover Dam, hook it up to giant pumps and pump all the water from below the Dam (the water that just generated this electricity) back up into Lake Mead.   They are so afraid that Lake Mead will dry up that they are willing to see the economies of three states suffer and millions of people go without water.  All they see is how little water is in Lake Mead and never think or even care what is or might be happening to the millions of people dependent on that electricity.  And it is that simple.
     Persons who have learned or remember the lessons of the 1930s and WWII years know that money in banks, the Federal Reserve or the U.S. Treasury (the end result of all those "debts repaid") is only potential economic activity and when the country is in a recession – meaning the private sector is not creating enough economic activity to supply the population with jobs and income to pay its bills – it is time for the public sector to release money into the economy.   It is not time to pump that water back up into Lake Mead and turn off the lights and faucets in California but to borrow water from up the Colorado River watershed and keep Lake Mead and the electricity flowing.  
     It is no accident that this metaphor works so well, because back in the New Deal day’s Keynesian economics was seen as "priming the pump."   If the private sector did not prime the nation’s economic activity pump, the public sector would, through borrowing and hiring the private sector to enhance or repair the nation’s community property.   It was not a matter of enlarging government, as the Tea Party would have us believe, but of putting the private sector back to doing what it does best as the employee of the taxpayers. Surely working for the taxpayers is not a disgrace when the nation’s economy is at stake.
     It is a deliberate distortion by the anti-Keynesian factions to suggest that all Keynesian-minded economists want to do is borrow.   They want to create this straw man because the follow up to the borrowing is a level of taxation that, while low enough to not stifle the growth of the economy, is high enough to pay back what was borrowed!  [When was the last time a conservative administration did more that promise to balance their budget?  Not in my lifetime! ]  
     It is this latter part of the Keynesian equation – the taxation part - that the conservatives will fight to their dying breath.   It is a matter of faith with them that there is no more water for Lake Mead up the Colorado River and, and even if there is, they are determined to not use it.   They would rather invest in pumps to refill Lake Mead and let Arizona, Nevada and L.A. return to desert.  And you can take that to the bank!

Originally posted to Steve Love on Thu Oct 21, 2010 at 12:10 PM PDT.

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