If you engage with government long enough, as I have, it is hard not to become cynical. Then again, cynics often see an unfiltered version of the truth. At this moment, politics weigh heavily upon voters who care. In a few weeks, we will determine who will occupy the White House and Congressional seats for the next four years. Here in the Bayou State, a tumultuous legislative session looms in the spring. The nexus of much of the turmoil in both Baton Rouge and Washington has to do with the desire to spend money greatly in excess of the amount available to spend.
The fiscal circus on display in most arenas of government comes with its own indigenous language. It is a perversion of English. Words are supposed to have meaning unless, as Humpty Dumpty pointed out in “Through the Looking Glass,” speakers twist them to serve their purposes. For example, in the alternate universe of government finances the word “budget cut” doesn’t mean reducing the amount of money actually spent. It means reducing the projected growth in spending. Budgets rarely reduce and spending usually increases even when revenues drop.
Obviously, the laws of economics and government budgets have a hard time co-existing in reality. To maintain ever-increasing levels of government spending without incurring the wrath of voters by significantly raising taxes, governments engage in a fiscal sleight of hand. The federal government has an easier path in that regard since it does not have, and refuses to enact, a balanced budget amendment. Currently, the U.S. has a $16 trillion debt.
Americans will pass it on to future generations, weighing heavily on their standard of living. Neither political party has a strong plan to reduce that level of debt. One submits budget proposals that eliminate the yearly budget imbalance (currently $1 trillion plus) in two decades and the other doesn’t even submit a budget.
Most states, including Louisiana, have balanced budget requirements. That doesn’t stop them from spending beyond their means. Laws consist of words. Words are the tools of lawmakers. For instance, here in Louisiana we have laws that restrict the use of one-time money in our state budget. Since there is no guarantee that such money will be there in the future, our laws say legislators cannot spend it on expenses that are annual in nature. That frustrates our lawmakers. The money is there, they contend, so why be restricted in how we spend it? In order to put off tough decisions, it is easier for legislators to simply torture words to, as Humpty Dumpty said, make them mean what they choose them to mean.
Budgets themselves are curious documents. Most households attempt to budget. Absolute necessities go in first (utilities, insurance, mortgages, etc.). The revenues remaining tend to go toward items that change from year-to-year (savings, home improvements, vacations, etc.). If revenues decrease, the non-mandatory expenditures go down.
Households that don’t budget tend to maintain their levels of spending and drive up their credit card debt until they hit their limit.
The federal government and many state governments act very similarly to the households that don’t budget.
Legislators try to maintain expenditure levels at all costs—consequences be damned. Irresponsible budgeters drive up cumulative debt levels, surreptitiously shift money around from one pot to another, borrow against trust funds (and often do not repay them), and take other actions to survive their next elections.
Spending is a bipartisan addiction in government at all levels. Debt is the drug of choice to enable it. Cynics, whatever their faults, don’t take vacations from reality. They can’t afford them.
Dan Juneau is president of the Louisiana Association of Business and Industry.