JUST PLAIN TALK: Better to look at the whole picture

Buz Livingston
Buz Livingston

As a kid during the summer, I inhaled books from our local library. I could hop on my bicycle and be there in 15 minutes unless I found some of my homeboys along the way. To illustrate how segregation worked, I never rode by a black family's home during my excursions, and the town was predominately black. It wasn't just a Southern thing. The first time I read about the great Roberto Clemente, racist writers in Pittsburgh called him Bobbie and mocked him with fake pidgin English quotes.

2020 brought a renewal of book reading for me. All the news just repeats itself, so I took a break and ended up not only reading more books than I had in decades, I was even part of a book club. Mama would be so proud. A friend and confidant, the brilliant Dr. Carolyn McClanahan, CFP, hosted and wrangled two appearances from Dr. Stephanie Kelton, author of "The Deficit Myth," 2020's economics bestseller.

Dr. Kelton is a leading proponent of Modern Monetary Theory, MMT, for short. Critics deride MMT because wasteful spending leads to financial ruin, and I went in quite skeptical. A bulb went off when Kelton used a simple economic model. One bucket is government spending; the other is non-government spending. If the government spends $100, it goes in the non-government bucket, and if it only taxes $97 back, then there's a deficit. The deficit can be good or bad depending on inflation, where the excess goes, and if the economy continues to grow. Critics like to use Greece or Argentina as examples of profligate spending, but these nations are not like the U.S., England, Japan, or Switzerland who have debt denominated in their currency; nations like these have more flexibility.

Yes, deficits matter but not the way we often think about them. If deficits bother you, focus on them all, not just the one that gets all the attention. Here are a few examples of deficits we ignore and overlook. 

America has a healthcare deficit. When I was a kid, Americans had the highest life expectancy on the planet; now, we have the lowest life expectancy in the developed world. Our infant mortality rate is more than twice that of developed countries.

We have an infrastructure deficit; South Walton residents can relate. The American Society of Civil Engineers estimates it will take $4.6 trillion over the next 10 years to get our bridges, roads, dams, levees, water systems, etc. to appropriate standards. 

When I graduated from college, everybody had a job; it may not have been their dream job, but it was a job. Our deficit doesn't stop with good jobs either we have deficits in savings and climate, to name a few. When you don't measure everything, you may not be measuring anything. MMT is not a panacea or a bugger bear but a lens to view how an economy works.

You can't always get what you want, but Buz Livingston, CFP, can help you figure out what you need. For specific advice, visit livingstonfinancial.net or drop by, masked, 2050 West County Highway 30A, M1 Suite 230.