March 12, 2012. It’s popular to say the country is like a family—when we’re in financial trouble we should save not spend.

But the country is like one big extended family, and that makes all the difference. We work for each other, and pay each other, and give loans to each other. But, it’s all in the family.

Suppose part of the family has a catastrophe – their houses burn down. So they tighten their belts and lay off some relatives that did their gardening and remodeling. Now those relative tighten their belts and stop eating out at Mom’s Diner—and she’s trying to save up because her house burned down. Etc., etc. Now we’ve got a family recession. If they all tighten their belts, they will all put each other out of work.

So the extended family needs the rich uncle Sam to start spending on gardening, remodeling and eating out. Then those folks will have income and keep spending.

The problem with the small-family, belt-tightening metaphor is that this family is a tiny part of a big outside world, that it can turn to for employment and income. If it stops spending outside, it only hurts the outside and not itself. But a nation is an extended family and when we stop buying things we hurt our relatives who are making and selling those things.

Once you see that our country is all family, then you see that spending always helps someone else in the family, and not spending always hurts a relative. If we all stop spending, we will all be out of work.