“You Can’t Spend Your Way Out of Debt”

There are tax protests going on today, because the government is spending a god-awful amount of money - more god-awful than usual. Or maybe they’re because a group of people who are accustomed to getting their way aren’t getting their way after 8 years. I’m not going to defend or attack what our government is doing at this point, but there is a sentiment going around these tax protests that I feel the need to say something about.

“You can’t spend your way out of debt”

Really? REALLY? Because last I checked, that’s exactly how most companies operated - most companies, at the start, have no cash flow and require a loan or investment - which they spend - in order to keep going until they can build up cash flow and start making money. If that cannot work then I guess we haven’t had any successful businesses in the last couple of hundred years.

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