The Budget: Chapter Four

The Budget: Chapter Four

If it were easy everyone would be doing it.

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Over the past couple of months I have written a series of columns dealing with the topic of national budget deficits and the national debt. They have been some fairly heavy reading and required some fairly heavy research and that is reflected in the lack of comment I have received from the readers of this column. I undertook this project because the debate around debt and deficit reduction generally devolves into a simplistic answer of just spending less money. That is not the debate at all and it is not useful to think of the problem in those terms.

We tend to attempt to solve problems through the use of our own experience. In our experience we are presented with a finite source of income such as a paycheck or some other form of predictable revenue. We apply that to a defined set of expenses to determine whether or not we use black ink or red ink. If we find ourselves in the red then we either have to find a way to increase revenue or decrease expenses. Generally expenses can't be altered immediately so revenue has to change or we default. It is not that simple with our national budget. The revenues are not finite nor are the expenses. They are governed by a set of philosophical principles that dictate our mode of doing business and define what we expect our nation to look like. So, when someone looks at you and tells you, “it's simple”, they are being either disingenuous or just plain wrong. If that were the case we would have made the correction long ago.

In my first column on the subject I tried to define the problem in terms of what we expect our government to do and how we had fallen short of properly funding those expectations. In the second I dealt with the existing tax structure and that arcane subject of tax expenditures. In the third I looked at the military budget and possibilities for significant reductions there. The next one will deal with the hot button topics of what we call “the entitlements”. It is here we will probably find the most disagreement. It is here that we really define the relationship of the people to their government.

The Simpson-Bowles Commission probably dealt with the problem in the most exhaustive manner of any I have read and they still only managed to barely report it out of committee with a majority. And, like all things we do in a republic, it was done with some compromise. There was give and take across all segments of the relevant factors. Personally I think that too much of the balancing was done on the backs of the poor and that the military did not offer enough to be saved. That is just me.

What I have tried to convey is that the problem is much more complex and demanding than most of us can comprehend. Each action will have intended and unintended consequences so we must be able to make adjustments in mid-stream using pragmatic methods and an idea of a defined relationship between the people and government. We have disagreed for the life of the republic over many of these topics and we can expect to continue to do so because of the tensions inherent in our Constitution and its constituents. I have an expansive view of the role of government that many of my friends do not share it but it is significant that we remain friends. That is the real task before us.

Our problems in many cases are not ones of spending and not spending but ones of the existing economic structure. We need to define the structure of our economy and the means by which we can raise revenues and use expenditures to further national goals. For instance, one of the goals I would like to see achieved is a comprehensive means of support for the citizen. Not by sending him or her a check but by improving educational achievement, work force training, medical accessibility and elder support. Some think that is wrong but I see it as a fundamental role of government.

On the revenue side I have always been a supporter of the progressive income tax. I think that much is expected from those to whom much has been given and, make no mistake, living in this country is a great privilege. I also feel that it is not acceptable for a large percentage of us to pay no income tax at all. All except the very poor should have to chip in a few dollars just to be a part of it all. Sacrifice is to be shared by all who share the benefits of our society and there should be few exceptions top to bottom. The tax code should reflect that by eliminating most of the tax expenditures.

So, next we will dig into the entitlements. One of the things about the entitlements are that not all of them are listed. Some are built into the economic structure. In some cases we will be able to save money by spending a bit more up front. We are still an exceptional country and have many advantages we can use. For one, I reject the notion that we are on the verge of losing global influence. Others may improve their lot but we will stay at the top for quite some time. How long is up to the people.

That's my take. I encourage you to dig deeply into budget matters and avoid the simplistic explanations. There are none.