A Thought on Government Spending

I’m prompted by Treasury Secretary Jack Lew’s testimony before the Senate Finance Committee Thursday.

The Wall Street Journal paraphrased him, in part, with this:

Given current spending and tax levels, the government would probably have to cut spending by at least 30%—or $100 billion—a month if the borrowing limit wasn’t increased.

This is an excellent argument for Congress getting spending under control.  Think about that: the Federal government, by Lew’s own claims, is saying it spends $100 billion per month more than it collects in tax (and other) revenues.  The Federal government, this year alone, is spending $1.2 trillion dollars more than it’s collecting.  That $1.2 trillion deficit goes right to our national debt; we borrow to cover that shortfall.  Getting this profligacy under control—eliminating that profligacy—is the only way to get rid of budget deficits, and the elimination of those deficits—not their reduction, but their elimination—is the only way to avoid having to repeatedly increase the amount of our borrowing, the only way to eliminate the “need” to repeatedly raise the debt ceiling—which is no ceiling, no limit at all, if it’s always raised for the asking.

Along these lines, Lew also said this (direct quote, no paraphrase):

I don’t believe there is a way to pick and choose on a broad basis.  The system was not designed to be turned off selectively.  Anyone who thinks it can be done just doesn’t know the architecture of our multiple [payment systems].

This is proof of our need to rationalize and streamline our payment systems, and the ideal time to do this is while we’re reducing and reforming our spending as a whole.

5 thoughts on “A Thought on Government Spending

  1. Yeah, I think that’s a WordPress thing that shows up when some of us bloggers only show the initial parts of posts so more posts can be displayed in a browser window.

    I’d have to think about your law suggestion; even though it’s been kicked around for awhile, I’ve not considered it. One consequence of such a law could be the Feds extorting the states to send more money, or the Feds will cut off their existing aid. The Feds already use existing aid as a means of forcing Fed-preferred behaviors in states and schools.

    There’s nothing wrong with providing money with strings attached, but that’s a capacity that’s easily abused: the recipient becomes hooked on the aid, and in the case of the Federal government, there’s nowhere to go to appeal even a perceived abuse.

    Many conservatives (as well as Conservatives–us 18th Century Liberals) make a big deal about the 10th Amendment–States’ Rights and all that. What we too often forget about is the flip side: States’ Responsibilities.

    A better idea, it seems to me, is this: take all the money the Feds currently send to the state, program by program (Medicaid funds, food stamp funds, farm support payments, for instance) and convert all those funds to block grants. The year of conversion is the baseline year. Every year after that, reduce the size of each block grant by, say, 10% of the baseline amount until the money being sent to each state for each program is $0. Let the states manage their own affairs with no interference from the Feds. The good citizens of nearly bankrupt New York or nearly bankrupt Illinois have no business sending their tax money to a nearly bankrupt California or a flush Texas.

    Eric Hines

      • Texas isn’t approaching bankruptcy, like my other example states. It’s a fine example in the context of my claim–that one state’s citizens shouldn’t be paying for another state’s citizens’ welfare. Not generally, but especially not when the recipient state is better off than the donor states.

        As to those 25%, in the present environment, or in the status quo ante, it’s hard to say how many are without health “insurance” by choice. My wife and I certainly would be.

        In a free market, with risk-based premiums, we’d get a more accurate picture, and more people would see what a bad bet insurance of any sort is, unless peace of mind is worth the above-actuarial-expectation premium that still must be charged.

        Obamacare does not correct this prior failure.

        Obamacare isn’t even insurance, it’s just dishonestly masqueraded as that: it’s privately funded, Federally mandated welfare. Now, if we want to have a national discussion of how much Federally funded health payment welfare we want (keeping in mind that neither health insurance nor Obamacare is a health provision service–medicine is an entirely separate industry), that would be a worthy enterprise.

        Eric Hines

  2. Not sure about your “time to read” number, ut forced me to time myself to see if I am an average reader or not.

    Would you support a law that said no state can receive more money back from the feds in aid etc than it sends to DC?

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