Would Warren Buffett fire the entire management of any company he owned that borrowed more than 10% of earnings in one year, regardless of circumstances? Because that is what his suggestion amounts to.
Firstly - I wouldn't put it past him to do something like that if he thought that would maximize his investment. The market doesn't view a debt of +10% of earnings to be that big of a deal however, has priced that risk accordingly, and Buffet has never been put in that situation.
Secondly - there is always a problem with equating governments to corporations, since governments are formed for public good and corporations are formed to maximize shareholder value. Their roles and motivations are quite different.
Yes. In principle, the shareholders are the people to whom the profits flow.
If you follow the money, you discover it goes to government employee's unions, old people and various other special interests. They are the shareholders in government. Not ordinary citizens.
'Old people'? You mean citizens who paid taxes to finance social security and medicare for previous generations of retirees? Scandalous - how dare they.
Further, ask yourself who makes a profit on public service - the child who is poorly educated by a failing school, or the teacher who is overpaid to provide that service?
Old people are ordinary citizens and all ordinary citizens with either die early or become old people. Unions are also collective groups of ordinary citizens. Thus following the money leads to ordinary citizens.
I sympathise with your first sentence and mostly agree with it. The second is wrong, even if you don't understand it as it was meant, as government employee unions.
You could make that case with some examples, but even then, the metaphor overwrites the reason why governments are formed - for the public good (and the protection of personal property, if you are a fan of John Locke). Thus, governments in your metaphor lose their actual purpose.
This ultimately typecasts actions that a government does, into business actions. Even though some of them would make absolutely no business sense. For example, why would a country raise tariffs or raise trade barriers? This would demonstrate weakpoints in the metaphor that other countries are clients.
A more extreme example would be where a country starts to kill people, by going to war with another country, or killing it's own people due to political upheaval. The metaphor really breaks down in that case. Businesses by and large, don't go and kill people intentionally. Obviously there are some historical and modern examples (Chiquita comes to mind) but I don't think that "Killing People" is in anyone's charter.
the metaphor overwrites the reason why governments are formed - for the public good
Money isn't the only way to represent wealth. The ideal government would ensure proper infrastructure(justice, defense, interstate transport) to the country without concern of profiting from it & for the benefit of all citizens. Money goes in, "shareholders"(citizens) earn dividends based off the infrastructure/programs they get back.
For example, why would a country raise tariffs or raise trade barriers?
Why would Verizon put an early termination fee on a contract? Is it because the customer benefited from a subsidized phone, kind of like how business benefits from subsidized infrastructure?
