Arnold Kling  

A Guide to Budget Rhetoric

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Because the budget is so far from being sustainable, budget rhetoric needs to be re-interpreted.

When their side refuses to cut spending because it would be "cruel," they are ensuring that future spending cuts will be even crueler.

When our side refuses to raise taxes, we are ensuring that future tax increases will be higher.

Until the baseline is a sustainable budget, the rhetoric will be the opposite of reality.


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COMMENTS (7 to date)
Thucydides writes:

A responsible case can be made that government should not consume a greater portion of national income than it does now, and therefore, the budget should be resolved on the basis of spending controls without tax increases. You are in effect accepting that government should get larger.

Mike writes:

Shout it from the hilltops!

Matt C writes:

If either side starts unilaterally giving up ground today, I do not think that means that side will come out with more of what they want in the long run.

Eric Hanneken writes:

Can taxes be increased? Sure, the government can raise rates, but revenue seems stuck around 20% of GDP.

And who is the "we" in "our side?" Republican politicians may be merely postponing tax (rate) increases, but that is only because most of them aren't trying to actually reduce government spending. The budget can be balanced while taxes are cut, if the government shrinks.

R Richard Schweitzer writes:

C'mon Buddy,

You know that all the budget rhetoric is just obfuscation of the real underlying issue:

The Functions of Government

at all levels.

Dave D writes:

This discussion is correct, as far as it goes.

A fuller understanding of the issues, however, requires knowing what American voters believe. (Check these statements at pollingreport.com.)

Most Americans, regardles of party, do not want Social Security or Medicare or Medicaid to be cut. The same is true of a host of other spending programs.

Most Americans will accept tax hikes only to the extent they themselves are not paying more taxes as a result.

Most Americans believe there are huge amounts of waste, fraud and abuse in current government spending. (Almost the same number think our foreign military forces, if brought home, would reduce spending greatly.) If only the politicians would cut that, they think, there would be plenty of money for the "real" needs that government should be taking care of.

Until Congress has actually done everything in cutting 'silly' spending and has raised taxes on millionaires (without immedidately spending all those new revenues and savings on other programs) AND the American people recognize that they have done all they can in those arenas, will either party be able to "sell" the distasteful part of "tax more" and/or "cut more" to the voters.

Discussion of public opinion in Greece made it clear that Greeks believe "if only we hadn't paid for the Olympics" we would have plenty of money for all our needs.

Public opinion is stubbornly resistant to reality at times.

Robert P writes:

I agree with Dave, and I also believe that the politicians play into a lot of the publics misconceptions.

In the end, taxes will have to be raised and budgets will have to be cut.

On the other hand, I think Peter Drucker's advice would be helpful as well, which is that the population has to decide what the purpose of the government is to be and the politicians should work to do that well.

As far as corruption and waste, I believe that there is plenty of corruption and waste in government. It is important that the government continually try to improve the work that it is assigned to do. Otherwise, the government will lose the trust of people to do its core functions, so bridges to nowhere, pointless research, no investigating medicare fraud all reduce the quality of the product purchased with tax dollars. Unfortunately, the government is not as responsive to their customers because they can use other people to vote to increase prices without any particular indiviuals consent.

As far as social security, I believe that it is a savings plan based on government treasuries, and people receiving benefits should be provided returns based on the return of treasuries.

As far as medicare, the government should reduce the barriers to entry so the supply can increase.

Americans are reasonable when given a chance, but politics is an industry based on marketing and not always based on substance. Americans are smarter and more educated then they have ever been, and everyone is getting a better understanding of economics, so I am optimistic. Is that one of the myths, that things are getting worse?

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