The Budget? Fudge It!

Have you ever noticed that the more politicians “cut” government spending, the more government spends?

Last month, President Obama put on a dog and pony show featuring his demand for $100 million in “spending cut” proposals from executive branch leaders. Earlier this week, the numbers on the “cuts” went up dramatically to $17 billion … and yet somehow Obama’s budget proposal, if passed, will represent the largest government budget in US history, so big that that $17 billion amounts to barely a drop from its bucket.

Hint: When a budget gets bigger, it isn’t being “cut.” It’s being “grown.”

One deception politicians use to turn increases into “cuts” is “baseline growth.” Once a government program is established, it is assumed that the amount of money required to sustain its operations will increase every year by some established percentage rate. If the program’s initial budget is $100, and its “baseline growth” projection is 5%, its projected budget for the second year will be $105, for its third year $110.25, and so on.

If, in the second year, the politicians set this program’s budget at $103 instead of $105, they then duly inform the citizenry that they’ve “cut” its funding by $2, when in fact they’ve raised that funding by $3.

This kind of legerdemain enables politicians to take any rhetorical tack they like, and to take different tacks for different constituencies.

Back in the 1990s, when the Republican Congress attempted to reduce the projected growth of Medicare spending (resulting in wailing and gnashing of teeth from the Clinton White House), I personally caught “my” congressman — a “small-government conservative” Republican — telling two different stories to his constituents:

To his “smaller government” constituents, he bragged about the cut in Medicare spending that he was backing.

To his “I’m older and rely on Medicare” constituents, he bragged about his proposal for an increase in the Medicare budget.

Whether he was lying or telling the truth to either or both constituencies depends on whether or not you buy the whole “baseline growth” dodge.

“Baseline spending” isn’t the only deceptive tactic for creating “cuts” while increasing spending. Cutting particular line items within a budget category while increasing overall spending on that category works too.

For example, President Obama’s budget calls for an overall increase in “defense” spending — yet his Republican opponents are raising the roof over defense cuts, because specific projects within the broader “defense” category are marked for reduced funding (or maybe just for a reduction relative to “baseline growth” … who knows?).

Opportunities for budget skulduggery are compounded, of course, by the fact that there are no limits.

When you or I budget for a project, we have to take into account the amount of money at our disposal: What we have on hand and perhaps how much we can borrow on the basis of our creditworthiness. When politicians budget for their projects, they arrogate to themselves the prerogative of borrowing any amount that they don’t think they can get away with milking directly from the taxpayer’s teat (and assigning responsibility for repaying the loan to the taxpayer anyway).

Government budget tricks are built into the way government does things. They’re part and parcel of any system based on a theoretically limited ability of A to coerce B into paying for whatever A wants. Once the element of coercion is introduced, attempts to get around the limitations come with it.

Above, I’ve used the term “government” as a substitute for a particular form of government: The state. I’ve done that because over the course of several centuries, we’ve all been conditioned to think of the state as the only, or at least standard, form of “government.” Now, I’d like to take a moment and ask you to re-think that association.

“Government” is all around us. “Governing” is something we do every day, all day long. Four people ordering a pizza, deciding on the toppings, and splitting the bill are “governing” themselves as a temporary group with a known goal. Every household is a “government.” Every club, every church, every golf foursome governs itself, and most of them do so quite well and without any need or desire to pull guns on each other.

The problems we associate with “government” arise when we allow ourselves to be talked into vesting designated “governors” with a monopoly on provision of this or that product or service, then tolerate coercive maintenance of that monopoly. In other words, they arise when we allow the creation of, or tolerate the continued existence of, the state.

The cure for the state is government — self-government.

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