Our economic time is similar to the revenues which accrue to government, in that both are commons where the relevant groups need to effectively manage resource scarcity. Just the same, one often hears how government budgets aren't constrained like family budgets. This is true but only up to a point. Since governmental budgets are in reality a resource commons, competing demands often create substantial problems eventually. Especially if the actual nature of the commons capacity and its already existing claims, is not well understood.
Yet perversely, both progressives and conservatives have become less inclined in recent years to take deficits seriously. Perhaps this unfortunate circumstance explains the recent appearance of budgetary strategies such as MMT in national public debates. Even though some MMT adherents acknowledge the reality of fiscal limits, these natural constraints are mostly downplayed when MMT is explained for citizens who don't follow the dialogue closely.
Despite the financial and monetary tools made possible by the transition to fiat money in the 20th century; at the end of the day, government revenue still relies on taxation. And taxation is everyone's responsibility, however it may be structured. We do future generations a disservice if we ignore this, because taxation is closely linked with the realities of our own time scarcities for getting things done. No one can afford to forget that each of us has the same time available, whether to accomplish personal objectives or fulfill responsibilities to others. While taxes may increase, our time availability simply cannot.
Plus: When our institutions make more time demands than we actually have to give, our collectively held time commons starts to become overfished. It becomes more difficult for citizens to coordinate their activities, and represents even greater problems for individuals who lack the resources to pay someone else to carry out a portion of their responsibilities. Once too many societal demands accrue to our aggregate time potential, the process creates substantial problems across the entire spectrum.
An apt way to envision excess time demands in aggregate, are national budgetary debt levels which are not only substantial for every citizen, but often extend beyond their actual income generating capacity. While we benefit greatly from ongoing per capita productivity gains of recent centuries, national debt obligations still cancel out some of these gains. In order for total factor productivity to improve, we need to gradually decrease the amount of national debt which accrues to all citizens. It has been difficult to visualize this process occurring, yet debt loads continue to shift into the future where they pose additional burdens and obligations for future generations.
Imagine collective or aggregate time potential as a fixed commons, and another relationship becomes evident. When individuals and firms in non tradable sectors engage in price making, their reliance on fiscal revenue allows price making to overfish the resource capacity, or fiscal revenue, which these groups hold in common. Conversely, price making in tradable sector activity is more marginal in its effects. Not only does tradable sector product tend to be of a discretionary nature, it is part of a much larger commons which accounts for the vast majority of global resource capacity.
There is also a skills arbitrage factor which affects the dynamics of time as a fixed commons. When specific skills sets that are basic in nature are claimed by certain groups, thereby increasingly their value, this process can gradually result in a loss of relative time value by groups which are restricted from the use of those skills sets. This is in fact what has occurred in our own time, as twentieth century skills arbitrage claims in the practice of healthcare, have gradually diminished the aggregate time value of millions of citizens by comparison. In fact, these losses are partially reflected in the levels of government budgetary debt as represented by every citizen.
Until recently, societies have done reasonably well in smoothing many aspects of time deficiencies via debt formation and insurance pools. However, both of these strategies are coming under increasing strain. For instance, health insurance is having to shift more of its prior responsibilities onto customers in the form of out of pocket expenses. And just as families are now making difficult choices to find alternative means to a wide array of healthcare expenditures, governments are increasingly having to make hard choices about budgetary particulars as well. In all of this, the U.S. will especially need to be careful to preserve its own fortunate monetary status, by just saying no to excess debt formation wherever possible.
No one expects quick exits from excessive use of debt and fiscal policy, after all these structural circumstance have taken a long time to develop. Still, nations could begin to experiment with debt free approaches to knowledge use and wealth creation, via alternate routes which better reflect the nature of our time scarcity and the constraints of our commonly held resources. Economic reciprocity in the form of symmetric time value is especially needed, to create new wealth and counter the effects of excessive debt and budgetary burdens. It's time to get started, so that no one need mandate debt jubilees in the near future, for debt which simply could have been avoided in the first place.
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