Sunday, September 28, 2008

Fiscal conservatism died a long time ago

Add "bank bailout" to the long list of things the Federal Government can't afford, but supposedly can't afford NOT to do either.

Add this on top of hurricane relief, veteran's benefits, military and security needs and interest on the debt. The list goes on and on.

Government is essential, I guess.

Hope there's still money for affordable housing, medical care, rebuilding America's infrastructure, dealing with climate change, clean energy, Social Security for post war baby boom generation and beyond plus other unforeseen crisis's the future will toss our way.

Private enterprise can do a lot of these things, but it seems like the private sector's track record isn't as good as it should be. Government is where people turn for solutions regardless of whether it's Republicans or Democrats in control.

Bush is often accused of "spending like a drunken sailor," but does he have any other choice?

Hope they don't cut something I might need in the future, like affordable housing or health care.

At the Federal level, they do have the printing presses for creating money. Our Federal Reserve can print up money, I guess. This leads to inflation, but inflation may be the least painful outcome. Budget slashing can be scary.

Of course the right wing does not have a monopoly on budget cutting ideas. The left can propose budget cuts also.

How about an end to enforcement of drug laws? Save money on incarceration and enforcement.

I'm not necessarily advocating these "radical" solutions, myself, though they might be good ideas. This is just for the discussion.

Political left has some budget cutting proposals that would make other folks nervous, for sure.

Slash the military, pull out of Iraq right away, layoff border guards, dismantle homeland security, end the war on drugs. These are examples of potentially scary budget cutting thoughts on the left. Also most libertarians, on the right or left, will think this way.


State Governments

At the state level, here in Washington State, budget making has a somewhat different dynamic. The state must balance it's budget, I guess because it doesn't own money printing presses; unlike the Feds. Our state constitution requires a balanced budget.

Luckier than most states, we still have a fiscal surplus, here in Washington State, but that enviable situation is ending quickly. If all continues statuesque, there is a projected 3 billion dollar deficit for Washington State government in the near future.

Budget balancing strategies are entering our governor's race.

Republican Dino Rossi is running for governor. Rossi has an ad out on the radio saying he will go through the budget line by line and find the fat. Then he promises not to touch education funding. Well, education is nearly 60% of state budget. I'm sure there is as much fat in education as there is in other parts of state budget.

You can't really cut a budget very effectively by taking most of the budget off the table.

Both with state and federal governments, people want and need the spending.

I guess it's hard to find stuff that isn't "high priority" for large segments of the population. Your retirement and money in the bank, for instance.

2 comments:

Michael said...

Hey Robert, great blog, I have to say I'm a fan.

You've got to realize that Dino has a lot of specifics for what he can cut that don't include education. I heard him talk the other day at a fundraiser, and he had some great ideas. For example, Washington state replaces the state vehicle fleet every 2 years! While the average Washingtonian replaces their car every 5-6 years, the state feels the need to do it every 2, costing the taxpayers hundreds of millions more than they should.

Also, state employees only pay 12% of their health care premiums while the average private sector employee pays about 22%. Dino said even if we raise the state employees premium to 16-18% (which is still better than the private sector), that will save nearly $500 mil. annually.

All being said, I think Dino has great plans for the budget, and when he says we won't have to touch education in order to do it, I'm inclined to believe him.

Robert said...

Thanks for writing. You bring up good points to think about.

I would guess raising the premium that state employees have to pay out of their own pockets for health insurance to 16 - 18% rather than the current 12% could be called a cut in education since many of those state employees work in education. For instance the University, here in Bellingham, is considered "education," and it's not only the largest group of "state employees" in the city, it's the largest employer in the city.

It could be seen as cutting education, if those employees work in education, but I don't mind doing it if it has to be done.