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The risk of freedom or the bondage of security?

Are we Americans supposed to fold and adopt the safe doctrine of economic complacency or wholeheartedly embrace growth? When will we learn that attaining success carries risk — and that to grow we must embrace it? This is not a pro-debt article, consider that when investing on credit, payback is the only certainty. So, we must be wise. The dichotomy is inevitable…as it is in every facet of life. What separates the “great” from the “average” is ultimately the unshakable desire to, for example, see your business or region prosper. Risk is ineluctable and success often presents itself as the unattainable.

Through the years, the focus has been on budgetary deficits — as if that is what drives prosperity. The talk along party lines has been a “seesaw” approach to taxes, to solve this issue precisely. A lack of adequate taxation is not the issue – it is the government that actually spends too much, but that is a topic for another time.

What lies at the heart of government-driven economic development? A growth mindset, coupled with the willingness to take calculated risk in order to stimulate the economy. This could return the investment multifold over the years. Tax reductions and targeted government grants are just some of the tools that the local, state and federal government can utilize to move their region forward. However, the budget talk is pervasive, you hear it when you turn on the TV — or visit “John Smith,” owner of the local bakery — on the radio and breakrooms before heading back to work from lunch. The spurious belief that, due to budgetary constraints, growth becomes all but impossible, has been promulgated for decades. At every level of government.

A budget in the black is always desirable and should be pursued. The problem, however, should take a backseat to the solution, that is how it actually gets solved. John Maynard Keynes, an economist, was a proponent of deficit spending to stimulate consumer demand. Its main uses have been on infrastructure, unemployment benefits and education. It is important to note, however, that these investments are to be made as part of a cyclical deficit and not a structural deficit. Government spending in times of need are meant to be catalysts for future growth. It is meant to increase aggregate demand by increasing spending, and those investments will then lead to further economic growth and set the stage for future expansion. Why go that far into deficit territory anyways? The point is that government stimulus works and that it can be accomplished while on a surplus.

It must be clarified that Keynesian economics mainly targets increasing aggregate demand, and that stimulating aggregate supply is just as crucial. This is where business growth comes in. Corporate tax cuts can help achieve just that, as well as direct government grants meant to help stimulate private sector investments. What really drives an economy forward though, is the free market – and governments play important roles in times of crisis. Moreover, it is not our concern for the deficit that will get us through the finish line but our focus on long-term financial prosperity.

Recessions can be hard to predict and the downturns of adversity tough to overcome, but that is a given. Issues in business almost always arise. They come with the territory, they are part of the game. This is not a disregard for sound finances and a balanced budget, it is an invitation to take calculated risk for the possibility of a better future. Business decisions should not be driven by apparent budgetary constraints, instead by a bold vision of the future. Can you imagine what would be of this country, of this town, if our great inventors and leaders would have succumbed to the fears of risk and growth?

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Carlos Jeer is the economic development director for the Marshalltown Chamber of Commerce.

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