Elsewhere, I have written on the resilience of the family enterprise as the most basic unit of economic organization in a country. My good friend, Gideon Markman, has written a nice piece in an upcoming issue of the Strategic Management Journal that traces and compares the origins of long lived family enterprises and the state of Rome since antiquity. The point of the article is that those organizations that are resource constrained tend to be more innovative, flexible, adaptable, and ultimately long lived. Rome's decline occured at its peak. It had grown fat with its own success and ossified in its ways, unable to see beyond its own parochial interests and internal petty strifes.
Same with economic organizations. Those most resource constrained are forced to be inventive, if they want to survive. Those that ultimately make it tend to survive for long periods of time. The sitting government in the U.S. should take a page from this lesson. Budget cuts are unlikely to hurt the country as much as it will help force difficult decisions that can lead to inventive solutions to our ailments. Throwing money at the problem, a simple minded and easy way to manage is usually the worse thing that a conscientious manager, family founder, or government leader can do. Cut social security, cut Medicaid and Medicare, cut defense, make across the board deep cuts in government departments, and one would be surprised how innovative the citizens of this country and what is left of government can be.