Government Spending

[HashiriyaS14]

We recently had a good (I think) exchange in the tax thread, so I thought I'd try to cover the other half of the coin.

Everyone always talks about cutting government spending, about how spending is out of line, how we're spending money on the wrong things and even spending too much money on the right ones.

Even among Democrats, you'd be hard-pressed to find someone who would say that they think the government should be spending as much of their money as possible.

That said, I think HOW the spending problem should be addressed varies widely from person to person. I'm interested in hearing where everyone stands on this issue.

I'll start off:

As a self-described "Libertarian Leaner", I'd like to see the government spending a whole lot less of my money. I support a lot of privatization and pretty drastic reduction in certain government programs. I think that ultimately, a dollar spent by private enterprise will generate more productive output for America than a dollar spent by the government.

That said, at present, we DO have all these programs, and we DO have the government handling a lot of things that should probably be handled by private enterprise. I recognize that bureaucracy is not easily eliminated and that the trimming will take effort and time.

The problem with this situation is that you cannot achieve lower spending by tax decreases. You can't just "cut off the spigot" and expect spending to decrease because Congress can simply borrow whatever they need to make up the difference. Tax cuts need to occur AFTER spending cuts, not before, as when they occur before spending cuts all we get is deficit spending, from either party or any foreseeable future party.

I believe that we need to make a real effort to cut down government spending, but I also believe that we need to be covering all spending with tax revenues at all times. The idea being that as spending drops, tax revenue requirements will drop over time as well.

I don't believe that my "Libertarian Lean", which as I describe it is my predilection for fiscal conservatism and individual liberty needs to override my pragmatism and my general belief that two plus two must always equal four. The ideology ascribes a goal, but the means for reaching this goal must still be fiscally responsible in reality.

And yes Jesda, I'm sort of baiting you again, but this time I really do also want to know where everyone stands on this.

[AZhitman]

I support a lot of privatization and pretty drastic reduction in certain government programs. I think that ultimately, a dollar spent by private enterprise will generate more productive output for America than a dollar spent by the government.

Hash, you're a true enigma.

The moer I learn about you, the more I'm convinced that if it weren't for the retarded mistakes of the past 8 years, you'd still be GOP.

Before anyone goes digging into their a$$ to pull out some nonsense that I'm just going to swat away like a whiffed slap-shot, hear me out: It's hard to reconcile what you've written with your intentions come November 4, because that's diametrically opposed to everything I've read that the DNC aims to accomplish.

However, I digress. You have your reasons, and since you present them so clearly, I'm confident you're fully aware of that apparent disconnect.

That being said, let me get BACK on-topic.

I've spent some time working on large budgets, specifically the entirety of the State's budget for adult probation (about $30M at the time). While we weren't in the budget crunch we're in now, we were always mindful of spending, as anything saved could go towards increased staffing, officer safety, raises, equipment replacement, and new technology.

BO mentioned that he'll "go through the Federal budget, line-by-line" to eliminate, cut back or improve "programs that don't work".

Bullcrap.

Great idea, but entirely unrealistic.

- One, whose definition of "don't work" are we using? It's way too subjective. - Two, it's a lengthy process. Our budget took months to complete.

Anyway, I digress again.

The idea of a line-by-line review IS a good one. It's, in fact, a necessity. But it'll only be successful without partisan influence, without special-interest influence, and if the next Prez can "forget" who got him there.

No sacred cows. Everything is up for discussion. And cuts HAVE to made like they would be in a for-profit corporation.

It's a daunting task, one that could easily occupy a four-year term.

I'm a firm believer that spending less is FAR smarter than increasing revenues. It's cheaper, simpler, and any effort towards this end compounds upon itself, making the task easier as it goes along.

And I don't have an issue with the current tax code, other than the way the monies are allocated. If I were overseeing the "Great Budget Review", I'd lean towards making sure the spending actually benefits those who contribute to the fabric of society, and that every dollar spent ALSO compunds upon itself (law enforcement expenditures often work in such a manner).

I'd encourage putting a little more towards TODAY to ensure we can spend less TOMORROW. That means embracing work-saving technologies and beefing up our infrastructure, even if it means sacrificing some other niceties in the meantime. Yes, many jobs would be replaced by tech. advancements. Sorry. Time doesn't stop. Buy a calendar. Keep up.

Monies for programs without a VERY SOLID, almost universal agreement, as to their efficacy would be in danger of being cut. This means a lot of "research" budgets for non-mission-critical activities would be on the chopping block. I can't see spending millions on saving the harp seal when there aren't enough police officers to handle crime. I can't see researching crab migration when our bridges are collapsing. Realism.

Anyhow, I probably missed the entire point of the original question. It happens.

[HashiriyaS14]

Hash, you're a true enigma.

The moer I learn about you, the more I'm convinced that if it weren't for the retarded mistakes of the past 8 years, you'd still be GOP.

Before anyone goes digging into their a$$ to pull out some nonsense that I'm just going to swat away like a whiffed slap-shot, hear me out: It's hard to reconcile what you've written with your intentions come November 4, because that's diametrically opposed to everything I've read that the DNC aims to accomplish.

Yes, I am aware of the apparent disconnect.

I am well aware that government spending will not decrease under an Obama administration, but the problem is that I'm not convinced they would under a McCain administration either. McCain supported nearly all of Bush's assorted money-burning initiatives, and I believe that he's just another GOP deficit spender.

I DO, truly, have a great passion for the idea of cutting government spending. That said, I have an even greater passion for making sure the math adds up.

The GOP has proven across the last three of their administrations that they like to spend money, and even worse, they like to spend borrowed money. Republican Presidential candidates, at least recent ones, always promise spending cuts and, as a rule, have never once delivered. GWB didn't do anything Bush 41 and Reagan didn't also do, he just did more of it.

The Democrats have proven that they also love to spend money, but at least they'll spend money we have and not money we borrow from the Chinese.

What the tax-cutters fail to understand is that a dollar spent is always a dollar spent, it doesn't matter if we pay a tax to fund it or if it gets borrowed. Spending borrowed money is PRECISELY the same thing as spending money taken from taxpayers, it's just that you'll be paying for it down the road as opposed to today.

The trick is NOT to cut taxes in hopes of motivating lower spending, the trick is just to lower the damned spending. THEN we can cut taxes and we'll all be happy.

I am all for small government, but tax cuts do not equal small government. There is no balanced budget amendment, and thus Congress and the White House can spend our money whether they tax us for it or not. They are, effectively, racking up "credit card" debt in all of our names. That bothers me, and I'm astounded that it doesn't bother more other people.

The spending absolutely needs to drop, but it will drop gradually, and in the meantime revenues need to equal expenses. The idea that we are somehow better off spending borrowed money (that WE all collectively owe) versus our own money now completely mystifies me. This is finance at it's most basic level and yet our government can't seem to get it right.

Anyhow, I probably missed the entire point of the original question. It happens.

Yeah, you sort of did, but you also posted up a great deal of great information about how budgets are drawn up and about what kind of changes need to occur.

Good post.

[marlin29311]

I'm a firm believer that spending less is FAR smarter than increasing revenues. It's cheaper, simpler, and any effort towards this end compounds upon itself, making the task easier as it goes along.

Yay for private sector thinking! Cutting your costs is far better than attempting to increase revenues - you don't know exactly what you'll get when you try to increase, but you can always be sure what you are decreasing. Maybe someone should share this information with the governor of NJ...

I'm for removing all special interest ties and cutting back spending as much as possible. Why do we need a national poet and other wasteful jobs such as that? I think that if we were to remove all of these un-necessary positions and funding cells from the government, we could lower tax rates for all, and people would be able to spend their money on their own special interests. I dunno, my idea has always been "if you want it, go buy it" not "here, the government will buy you what you want if you lobby for it enough."

[HashiriyaS14]

Cutting your costs is far better than attempting to increase revenues

The problem with this statement is that it doesn't apply to government.

At the moment, costs already exceed revenues. Cutting costs is, due to political concerns, going to be a long and difficult process. It needs to happen, badly, but it will not happen overnight.

Until it DOES happen, why is it okay to be spending borrowed dollars in the meantime?

When the government spends a dollar, you're getting "taxed" for it whether you think you are or not. The US government borrowing a dollar to spend it IS a tax on you in the most direct sense, but it's one wherein you'll be paying interest rather than just paying it upfront.

In our personal finances, it may often be wise to cut our own spending. Take, for example, the family who has over-extended themselves and bought more house then they can really afford. The smart thing is to downscale the home, but this takes time, you can't switch houses overnight.

Is the solution, in the meantime, then to pony up and pay cash, take the hit, or to pay your mortgage with credit-card cash advances at 30%? I think the answer is pretty obvious.

People need to get over the idea that a tax cut, or having less money to spend, will somehow motivate lawmakers to spend less money. It will not, it will have no effect whatsoever so long as they are not required to have a balanced budget. All it does is increase the deficit. You DO need to cut costs, but until I see someone who is serious about cutting costs I will support the responsible funding of our current obligations.

[AZhitman]

The problem with this statement is that it doesn't apply to government.

At the moment, costs already exceed revenues. Cutting costs is, due to political concerns, going to be a long and difficult process. It needs to happen, badly, but it will not happen overnight.

NOT necessarily.

Case in point: How hard would it be for the next Prez to come in and make a no-argument decision on the following: http://www.washingtonpost.com/....html

How badly do we need a $46,790 portrait of Donald H. Rumsfeld in the Pentagon hallway? JUST SAY NO!!!!

One example, with many, many peers.

[HashiriyaS14]

NOT necessarily.

Case in point: How hard would it be for the next Prez to come in and make a no-argument decision on the following: http://www.washingtonpost.com/....html

It would be as hard as it would be for any other President who's ever sat in the chair, which is to say, not all that hard.

But, as we've seen time and time again, they keep saying YES. I don't for the life of me understand why, but they do it.

As I've said, quite emphatically and repeatedly, I am ALL FOR drastic cuts in spending in a number of areas.

They NEED to cut it, but you can't force them to cut it via tax cuts, as we've seen many many times. If you can figure out a good way to make them stop spending, I'm all ears. That's the trillion dollar question.

Until someone answers the trillion dollar question, we need to stop plugging the shortfall with debt. We need to plug it with tax revenue.

Hell, maybe if we made a policy of taxing for EVERY dollar we spend, taxpayers would wake up and realize that they need to pressure their elected officials to stop spending so much.

People don't see debt though, they don't understand it, as is evidenced by the debt problems of so many Americans. We'd rather put it off until tomorrow and make the problem worse, which I don't understand.

[AZhitman]

I think it's all a function of being aware and educating ourselves.

When it was "$400 toilet seats" for the military, it got looked into... and, a lot of it was false alarm. But it DID effect change.

We just need to know WHERE the waste is so we can pressure our elected officials to do the right thing. Absent significant public pressure, they won't. Not GWB, not BO, not JM, none of them.

[HashiriyaS14]

Absent significant public pressure, they won't. Not GWB, not BO, not JM, none of them.

And maybe that's really the answer, create public pressure.

Everyone is so on about the economy right now, but no one seems to be bringing up the fact that we spend $500 BILLION DOLLARS on interest alone. That doesn't pay down any debt, that's just interest.

What could the US economy be doing if $500 billion was left in taxpayer pockets every year, rather than sent to the Chinese or whomever? Probably an awful lot, I'd wager. That's not a one-time thing, that's every single year. That would be HUGE.

People don't see it because it chips away at them gradually, year over year. It's a damned shame that there isn't more public resolve to do something about it.

The only problem is that the long-term solution isn't very palatable. Attaining the goal of freeing up that $500 billion annually would require two things:

1.) Cutting Spending. Duh. This is easier said than done, as everyone seems to want to cut spending everywhere but "their own backyard". Everyone supports lower spending until that lower spending impacts them. I'm not hopeless about it, but it will take a LOT of people with some serious political chutzpah.

2.) Addressing the current $10.2 trillion deficit. This deficit effectively represents deferred taxes. We as a nation have spent $10.2 trillion that we didn't tax ourselves for, and we're going to have to pay it off if we ever want to dig ourselves out of this mess. We're going to have to pony up enough taxes to cover that $10.2 trillion today because we didn't do it yesterday.

Granted, some of this might be able to be made up by further spending cuts, thus creating a surplus, some of which might be used to pay off some debt. The idea of generating the whole $10.2 trillion this way, however, is not in the cards. You can only cut so far, we still need roads, a military, and schools. Sooner or later, some politician is going to have to be able to look the American people in the eye and get them to pony up all this cash.

It sucks, we don't want to do it, but that's how life rolls sometimes. $10.2 trillion is the same as 3.29 YEARS of government operation. We've effectively funded the last 3.29 YEARS of everything our government has done on a credit card. As we all know, sooner or later, credit cards need to get paid off.

Can you imagine funding every expense for 3.29 years of your life on credit? Borrowing money to pay your mortgage, your gas, your food, everything? Never actually earning or paying a dime of real cash? That's what we have done. We need to suck it up and fix it before anything will get better.

[WDRacing]

No sacred cows. Everything is up for discussion. And cuts HAVE to made like they would be in a for-profit corporation.

It's a daunting task, one that could easily occupy a four-year term.

Absolutely nothing I can add to this statement nor the post in general. Examine and trim ALL that can be, and in some cases I'm sure you'll find several short comings that actually need more funding. If a President and his staff could do ONLY this, they would become the single best leader this country has ever had.

Trim the fat...

Excellent thread Hash, I will stay tuned and educate myself accordingly