What Is, and What Ought To Be

Journalists, politicians and liberal arts students get to think a lot about "what ought to be".  "what ought to be" thinking is not constrained by the possible.
Grown ups and professionals have to think about "what is", including what is and is not possible. 

Here are a few examples of "What Ought To Be" thinking:

We can provide health insurance to 30 million more Americans without increasing the federal debt.

We can create jobs while simultaneously increasing the costs of hiring by increasing the minimum wage, and granting more power to unions.

We can spend our way to prosperity with a $1 trillion shopping spree.

We can stop the spread of murderous hatred for our nation's core principle of freedom and equality by talking and hugging.

We can close the Guantanamo Bay detention facility because it might pose civil rights issues, and an ideal substitute location will miraculously make itself known to all.

We can fix the bursting of the real estate bubble, which was caused by excess liquidity, by creating a tidal wave of even more liquidity.

We will spur demand for home and auto purchases by handing out money for a couple months, and this won't destroy future demand when the couple months are over.

Sure we'd all love it if we could make everyone better off in the long term and nobody had to create the wealth to make that happen.  Unfortunately economics tell us that every dollar that the government spends or hands out is at the expense of someone else.  We'd love it if life improving and life saving technology were created because people want to make the world better, and not because they want to make money.  "what ought to be" thinking typically results in robbing the innovator, the producer, the investor and the employer from incentives to innovate, produce, invest and employ.  People acting in their own self interest is what creates wealth, jobs and innovation.  Self interested activities increase the size of the pie for everyone.  "what ought to be" thinking is focused on dividing up the pie, and a lot of the pie gets wasted along the way.  Our best and fastest path to get back to economic growth is to get out of the way of those who want to produce.  Although it may not sound nice, it has worked for 230 years and has created the wealthiest and most innovative nation in the history of earth.