Tag Archives: government debt

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Score One for Fiorina: A Clarion Call to Budgeting Sanity

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English: A graph of the US GDP compared with F...
A graph of the US GDP compared with Federal budget outlay. (Photo credit: Wikipedia)

In every presidential election cycle, candidates find themselves called upon to present plans for balancing the federal budget. And, for the most part, their plans call for doing so — in the sweet bye and bye. Never next year, seldom even next decade. The plan is for the current crop of politicians to kick the can down the road some  more, leaving it to future Congresses and administrations to exercise the fiscal restraint that these politicians  won’t.

Not Carly Fiorina. On MSNBC’s Morning Joe (October 7), Fiorina claimed she would submit a balanced budget to Congress in her first term.

Will she? Probably not, if for no other reason than that she wants to increase, not decrease, spending on the single largest sector of the budget, “defense,” so that she can continue the two previous administrations’ program of idiotic military adventurism around the globe.

But, be that as it may, when she explained how she proposed to attack the budget, she put her finger on one of the biggest bad habits of government spenders and promised to fix it. The problem is something called “baseline budgeting.” She proposes to replace it with “zero-based budgeting.” A quick primer:

Under baseline budgeting, the federal government assumes that each department will spend as much as it spent last year, with an automatic upward adjustment reflecting the inflation rate and US population growth. That’s on rails. The only things that have to be justified in the departments’ budget requests are changes upward or downward from that automatic amount — and how often do you think a bureaucrat requests LESS money?

Under zero-based budgeting, it’s assumed that every last dime requested has to be justified from the ground up. Just because the department spent $100 million on chips, dip and  party favors last year, it doesn’t automatically get $102 million for that this year, with the department only having to justify an extra $10 million to buy ponies for all the deputy secretaries (with THAT $10 million forming part of NEXT year’s “baseline”).

The political class, predictably, went ballistic. By the time Fiorina left the set, budget “experts” were loudly reminding us that zero-based budgeting can never work. Why? Well, because the government is just so big and complex that we can’t can’t expect its swarms of bureaucrats to spend time explaining their demands.

The only way to balance the budget, the “experts” say, is to keep automatically forking over more money every year and trust that spending will eventually magically go down on its own. Someday.

Ultimately, balancing a budget is simple: Spend less than you bring in. “Experts” who pretend that zero-based budgeting is out of bounds are the problem, not the solution.

Thomas L. Knapp is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism (thegarrisoncenter.org). He lives and works in north central Florida.

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More Sequestration: The Best Bad Thing, For Now

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English: CBO Long-Term Public Debt Scenarios
English: CBO Long-Term Public [sic] Debt Scenarios (Photo credit: Wikipedia)

 

If American politicians lived in the real world, US president Barack Obama would propose and Congress would pass a balanced budget for the federal government.

But American politicians don’t live in the real world. Since World War II they’ve inhabited a utopian fantasy in which the federal government has continuously spent more money than it has brought in, on the promise that that debt will eventually be paid off.

Someday.

By someone.

So we’ve once again reached the periodic moment of untruth, with a September 30th deadline for Congress to decide between three alternatives:

Obama’s completely insane budget proposal (which increases spending across the board on both the military and civilian sides of government); or

One of several equally crazy Republican budget proposals (which would likely increase military spending and make some cosmetic cuts to civilian spending); or

Another fake “government shutdown,” accompanied by automatic “sequestration” entailing trivial cuts in both areas.

Under each of these alternatives, the federal government will run a deficit (in English, it will kite a check and overdraw its accounts), adding half a trillion dollars or so to the federal government’s debt (euphemistically referred to as the “national debt” or “public debt” — the politicians want to keep you believing that you’re responsible for their fiscal irresponsibility, and their creditors believing that you’ll cough up someday).

The best choice — in fact, the only reasonable choice — would be for the president and Congress to bite the bullet and balance the budget. That is, make a reasonable estimate of revenues and craft a budget that appropriates and spends less than that estimate.

But, like I said, reasonable is off the table. Neither the president nor Congress is willing to balance the budget this year, or to commit to doing so for any year in the near future. So it looks sequestration is the best we can hope for right now.

How about the next crop of politicians?

American voters will elect a new president, replace (or re-elect) the entire House of Representatives, and replace (or re-elect) 1/3 of the US Senate next year, to take power in January of 2017.

Many of the campaigns are already under way, and the presidential candidates are already debating each other in public.

Why not hold their feet to the fire, and let them know that any candidate who proposes to continue deficit spending will not receive your vote?

Thomas L. Knapp is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism (thegarrisoncenter.org). He lives and works in north central Florida.

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“Defense” Spending: Time For More Than Cosmetic Cuts

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Military expenditure as percent of GDP, data t...
Military expenditure as percent of GDP, data taken from the CIA factbook. (Photo credit: Wikipedia)

The US Army is on track to reduce its size from current levels (490,000 troops) to 450,000 in 2017 and 420,000 by 2019. In a July 24 editorial, the New York Times came out in mild support of the half-measure and against “maintaining bases and a level of troops that go beyond what the country needs and can afford.”

The Times doesn’t go far enough. The cuts are, at best, a good start. By any reasonable “need and affordability” standard, military (euphemistically referred to as “defense”) spending cuts should go far deeper. A worthwhile goal would be to cut US military spending by 75% between now and 2025.

If those cuts seem unduly deep, keep in mind that military spending is the single largest item in the federal budget, and that the US has now shouldered the burden of defending western Europe and the Pacific Rim since the end of World War II.

We’ve been waiting for our promised “peace dividend” for nearly a quarter of a century since the collapse of the  Warsaw Pact. It’s time to furl the US “defense umbrella” and let Germany, France, the United Kingdom, Japan, South Korea, the Philippines, Taiwan and other US clients assume responsibility for (and cover the costs of) their own defenses.

Through the first half of this decade, the partisan fight over military spending has devolved from an argument over how much to increase that spending (the Obama administration proposed 10% growth by 2018; congressional Republicans referred to that proposal as a “draconian cut” and demanded 18% growth) to acceptance of actual minor cuts. It’s time to take the next step.

A 75% reduction would still leave the US in the position of, by far, top military spender in the world (the cut would have to be more like 90% to match China, the second place spender). Given the American weapons technology edge, an existing arsenal that can be mothballed and re-activated at need, a reserve and National Guard system which can deliver well-trained troops on relatively short notice, and a buffer zone of two oceans between the US and its most likely future enemies, 25% of current spending levels would remain an embarrassment of riches.

Politicians of both parties perpetually promise balanced budgets — some day. They’ll never get there without first reining in a military-industrial complex which has sucked America’s economy dry for three quarters of a century now.

Thomas L. Knapp is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism (thegarrisoncenter.org). He lives and works in north central Florida.

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