Arnold Kling  

The Challenge to Cut Spending

Academic Salaries... Comment of the Week, 2003-06-0...

Recently, Kevin Drum issued this challenge to those who claim to prefer lower government spending.

Let's hear what you want to cut. And remember, for bonus points you have to include some programs that you yourself benefit from.

I was reminded of this when I got an email about this press release.

Senators Paul Sarbanes and Barbara Mikulski today announced that the Maryland Technology Development Corporation (TEDCO) ( has received a $200,000 grant from the U.S. Economic Development Administration (EDA) to provide additional support for technology business incubators throughout Maryland... TEDCO and the Maryland Department of Business and Economic Development (DBED) matched the grant with $200,000 in state funds.

I benefit from this program in two ways. First, about a year and a half ago I invested in a company that received funds from this agency. Second, as a Maryland resident I benefit from having Federal tax dollars funneled into my state.

However, as a citizen, I consider this to be wasteful. The whole incubator idea is a sorry leftover from the Internet bubble. Long after the market has soured on the idea, the government still wants to put money into dotcoms.

There is no reason to believe that government should replace--or even supplement--the private sector in picking companies. Moreover, at a time when our state legislators are howling about the pain of a deficit, you would think that a venture capital program that was started when Maryland was flush with capital-gains revenue could be trimmed.

I realize that $200,000 is a drop in the bucket in the Federal Budget. That does not mean that I shy away from cutting larger programs, such as Medicare. But the fact that my Senators are proud enough of this to issue a press release, when I think that they should feel shame, indicates the difference in viewpoints between the spenders and those of us who believe that it is possible to restrain spending.

For Discussion. If you live in the United States, do you live in a state that does not have a venture-capital subsidy program of this kind?

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The author at Truck and Barter in a related article titled So Much to Cut , So Little Time writes:
    TITLE: So Much to Cut , So Little Time URL: IP: BLOG NAME: Truck and Barter DATE: 06/25/2003 04:25:43 PM TITLE: So Much to Cut , So Little Time URL: IP: BLOG NAME: Truck and Barter DATE: 06/25/2003 04:25:43 PM [Tracked on June 25, 2003 4:25 PM]
COMMENTS (5 to date)
Eric Krieg writes:

It's a myth that conservatives want to cut spending in general but not in particular. I mean, if libs like Kevin Drum want to ask the question of what to cut, he should go to a conservative for the answer, because we have lists!

About the only federal program I have ever actively participated in was the direct student loans from the DOE. I thought that Sallae Mae did a much better job. So start cutting there.

What else? Tolls on the Interstates? Sounds good to me. Does air travel pay for itself? I fly a lot.

Of course, there's the big one, Socialist Insecurity. I would be happy to forgo all future SS benefits if I didn't have to pay one more dime in payroll taxes.

Joe Kristan writes:

Not right now, but the Iowa Legislature is supposed to send such an animal to the Governor for approval today. If you are close to the border, stand back for the stampede of entrepreneurs...

David Thomson writes:

Any politician daring to cut spending will pay a severe price. That is why the Bush administration will do virtually nothing until after the next election. Have we already forgotten the lesson learned from Newt Gingrich’s effort during the mid nineties? Some people claimed that Gingrich met his Waterloo because he advocated overall “right-wing extremist” policies. I think this to be very unlikely, and the real reason is that Gingrich desired to cut government spending.

$200,000 is indeed “a drop in the bucket in the Federal Budget.” However, it can be a very big deal to the small handful of folks receiving this funding. A couple of managers, for instance, may see their paychecks increase by 10-15% or even more. Thus, it behooves them to scream and yell like immature children if anybody dares threaten their pocketbook.

What will happen after the 2004 election? I expect that George W. Bush will bite the bullet and take the heat. If nothing else, we need to raise the Social Security retirement by a few more years. Also, why is our government providing drug benefits to retired people who rank among America’s wealthiest demographic group? It’s time to end the myth that most of our older citizens subsist on dog food and scraps left in garbage cans.

Patrick R. Sullivan writes:

Kevin Drum's challenge is, of course, disingenuous. Somewhat akin to asking Willie Sutton what he thinks about laws prohibiting robbing banks. Whatever the merits of the laws, that doesn't change the fact that Sutton was correct to note that that is where the money is.

What Drum is trying (intentionally or not, I don't know enough about him to say) to do is deflect attention from the sheer waste inherent in government programs. One needn't be a disciple of Tulloch and Buchanan (but it helps) to see how the incentives distort behavior toward less highly valued uses of resources. It's no accident that those who place a high priority on government activity focus on inputs (funding), and ignore results.

The question should not be "how much to spend" on this or that, but on who gets to decide how much AND the manner in which the amount is spent. Anyone think the country would be better fed if we increased the amount of money spent on food, but switched from the present system of market allocation of food to one more like the public school system? If there is such a person, he might want to click on this link:

Patrick R. Sullivan writes:

As luck would have it, Joanne Jacobs has an item that nicely demonstrates my point:

The state of California, supposedly in the midst of a gigantic budget crisis, wants to make it more expensive to construct new schools. Expanding the scope of one of the most blatantly racist laws, the Davis Bacon Act, ever passed in the U.S.

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