Written November 19, 1990
Hooray for the federal budget deficit!
Did you hear the one about the congressman who had a recurring nightmare? Every night he’d wake up screaming and in a cold sweat. It seems he kept dreaming that all the money he was spending was his own!
Money is the lifeblood of government. Without money — your money — government could do nothing because there would be no way to pay the bureaucrats and enforcers. The more money they take from us, the more mischief they can work.
Since World War II every dollar of legislated higher federal taxes has been matched by from $1.28 to $1.58 in higher federal spending.
For years inflation kept pushing people into higher and higher tax brackets. For every one percent of inflation, tax revenues automatically increased by 1.6%. Sort of like a cost of living raise for Uncle Sam. Thirty grand used to be a lot of money. Today it’s not but if you make that much you’re taxed as if you were rich. At least the tax brackets are adjusted for inflation these days. Still, this “bracket creep” gave congress steady increases in funds available for their favorite programs and enough extra for new programs as well.
The congress was supposed to match each dollar of tax “reduction” won by President Reagan with two dollars of spending reduction. It didn’t happen. The congress is spending more than ever.
It is a measure of the mindset of the congress that many give-away programs are referred to as “entitlements” and letting the taxpayers keep some of their own money is an “expenditure.” A positively huge portion of the budget goes to these “entltlement” programs and most such programs have automatic escalators built in. That is, payments increase as the cost of living increases.
The ever-so generous congress has dug a hole from which the country cannot escape without curbing these entitlements. The congress claims to have no control over “entitlement” spending since it is all automatic in accordance with the legislation they’ve crafted. They could change the enabling legislation if they wanted to but they know they would lose some of the votes bought with those programs, so they claim they are unable to do anything more than raise taxes to pay the costs of their programs.
Did you know that in some cases it is actually against federal law even to study the possibility of cost reduction in federal programs? Does this sound like responsible government to you?
The deficit is actually greater than most people think because the government has many clever ways to move current spending “off the books.” The Congressional Budget Office (now there’s an oxymoron if ever there was one) does not use what is known as GAAP (Generally Accepted Accounting Practices).
A balanced federal budget cannot exist for long, if ever. The temptation would be too strong to increase spending.
When all is said and done, it is only the huge “budget” deficit which keeps the congress from spending even more profligately than they do. So I say, “Hooray! I’m glad there’s a huge budget deficit.” It’s the only thing preventing the government from growing at an even greater rate.