Monday, February 13, 2012

How 'bout budgeting your own spending for a change?

With the unveiling of the President's latest budget proposal, the political and economic analysts are out in full force, ripping it apart or praising its vision. David Boaz at Cato offers his take (and some good graphs), which is essentially that there's just no real attempt to control spending:
The problem on Capitol Hill is spending, deficits, and debt. Members of Congress need to tell the president that you don’t rein in out-of-control spending by increasing it. And if voters want members of Congress to insist on cuts, they’re going to have to let their representatives know that.
And that's absolutely true. But what bugs me about these budget proposals supposedly designed to lower the debt is that the "lowering" always takes place down the road. Here's the White House overview of the budget proposal. Look at this bit:
Of course, even as we invest in the areas critical to creating an economy that’s built to last, we also have to reduce our deficit and bring down the debt. That’s why the Budget lives within very tight spending caps that reduce discretionary spending by $1 trillion over the next 10 years and, including that amount, has more than $4 trillion of balanced deficit reduction. In fact, discretionary spending in this Budget is reduced from 8.7 percent of GDP in 2011 to 5.0 percent in 2022. And by 2018, we cut the deficit to less than 3 percent of GDP, and stabilize the debt-to-GDP ratio.
Pardon my French, but WTF?
It is the 2013 budget, isn't it? What does it have to do with spending ten years from now? I'll tell you: zero, nada, zilch. Newsflash: no matter what happens in November, Obama will not be President in 2018, much less 2022. His budget for FY2013 can't curb spending when he is out of office because--let's be crystal clear on this--future Congresses and Administrations are not bound by the plans in Obama's budget for 2013.

And the President is hardly alone on this issue; past Presidents and Congresses have engaged in the same kind of shenanigans. Put simply, it works like this: we're gonna spend a lot of money right now because we have to, but then really take control of the spending down the road. Of course, the second part never happens. And that's exactly why we're in the mess we're in today.

So I suggest a new approach for budgets: no more plans for future cuts; deal with the money being spent and coming in for just the one year the budget is for, no more. That's the only way to actually control spending. Every schoolboy knows that.

Cheers, all.

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