The Federal Budget, Part V

Before I move on to my final principle of fiscally responsible governance, allow me to summarize the guidelines which have been discussed so far:

  • Subsidiarity. Many public goods can be achieved at the local level without getting the federal government involved. Thus, when evaluating the merits of a particular federal program, we should always ask ourselves whether it would be wiser to allow a community group or local government to assume responsibility instead.
  • Accountability. Each and every government bureaucracy must be required to demonstrate – on a regular basis – that it is getting results — and that it is doing so at the minimum ethical cost. It is irresponsible in the extreme to shield some federal programs from this kind of scrutiny on the basis of their intended missions.
  • An Absence of Favoritism. The federal government should refrain from awarding subsidies to politically active businesses. These subsidies and special favors have wide ranging effects on the economy which, in many cases, disproportionately hurt the poor (corn subsidies being the most egregious example).

Now let’s add to this list the principle of sustainability:

  • Sustainability. When designing a new government program – or when evaluating an old one – we have a moral duty to ensure that, barring complete civilizational collapse, future generations will be able to enjoy, at the very least, the standard of living that we enjoy. This means that we have to be flexible enough to accept reform when circumstances change.

Obviously, this last principle is especially relevant when we’re discussing things like Medicare and Medicaid, Social Security, welfare, public pensions, etc. As I stated in the first post of this series, I believe the federal government does have a responsibility to maintain a minimum social safety net — but it certainly won’t be able to do so if our politicians continue to insist upon pissing money away instead of exercising their common sense.

When the Social Security program was first created in 1935, the average life expectancy was about 60 years for men and 64 years for women. Indeed, many people failed to reach the age at which they would begin to receive Social Security benefits. But as we all know, that is no longer true today. Thanks to medical advancements, many Americans are living until they are 80 and beyond. Thus, many receive Social Security benefits for fifteen to twenty years before they finally pass on. Moreover, we are just about to experience a huge spike in Social Security pay-outs as the “Baby Boom” cohort finally reaches retirement age.

The upshot? While we Americans are fecund enough that we are not quite in the same boat as the rest of the developed world, we are still facing a genuine entitlement crisis. Those of us who are in our 20’s and 30’s and are aware of what is happening are pretty damned skeptical that we will see a single cent of the funds we are currently pouring into Social Security if the program isn’t reformed now. At the very least, the retirement age needs to be incrementally raised to a level that is more commensurate with the current life expectancy.

Additionally, our social programs need to be streamlined across the board. Just as there is a lot of duplication and redundancy in, say, the NOAA, our safety net is remarkably inefficient. The GAO recently reported, for example, that there are 80 separate programs within the government just to help the poor see to their transportation needs. Good gravy! Think about how much we must be wasting paying for the office space and staff expenses! We must find some way to gradually consolidate these entities so our nation doesn’t collapse under the weight of her own debt:

Thanks, Iowahawk. You’re a genius.

Throughout this series, I don’t think I’ve ever proposed a change in policy that is unreasonably harsh. No — the only radicals in this debate are the leftists who would have us ignore intergenerational justice in favor of keeping the spending party going for those of us who happen to be walking about. Such policies may sound wonderful to voters in the short term, but given that money does not grow on trees – not even in Obama’s rainbow and unicorn garden – they will almost certainly end up screwing our children. We shouldn’t cede the moral high ground to the Democrats’ prodigality.

The Federal Budget, Part IV

In this, the penultimate post of this series, I’d like to start by discussing prices. Why do the medications for my severe rheumatoid arthritis (with the exception of the prednisone) cost so much? Why is Spam so darn cheap? Well, contrary to popular belief, a price is not a construct that is artificially imposed on an item to satisfy the greed of today’s capitalist robber barons. Rather, a price reflects either the inherent cost of producing a product or the consequences of government policy — or sometimes both.

In an entirely free and unmanipulated market, prices are determined in large part by supply and demand. If many people are clamoring to own a particular item and that item is in short supply (perhaps because it is expensive to produce or extract), its price will rise. If a product floods the market and is not snapped up by buyers, its price will decrease. Prices, in effect, are supposed to communicate to the consumer the relative availability of various commodities. Prices are also supposed to allow ordinary consumers to wisely ration scarce resources. If there’s a massive failure of the annual orange crop and oranges suddenly start selling for $10 per unit, fewer people will buy oranges. Consequently, those who really, really want to have oranges (no matter the price) will have a chance to snatch them up.

Unfortunately, that is not the whole story when it comes to prices in the US, as the federal government has constructed a cloud-cuckoo land of subsidies, all of which favor some industries and corporations at the expense of others. The US government also increases the costs of production through regulations of various kinds, and not all of these regulations actually result in a net benefit for the consumer. And finally, Americans are often confronted with the sequelae of the policies of other nations. This is particularly true when it comes to the pharmaceutical industry. Nations with government-run healthcare systems set artificial ceilings to control the prices of various medications. As a result, American pharmaceutical companies are forced to pass the cost of their research and development to us. Awesome.

Thanks for increasing the price of my drugs, jerks!

Of course, we can’t control what voters do in other democratic nations. We can, however, control the things our own government does which distort our economy and thereby lead to government waste and a lower standard of living for the rest of us. My third principle for fiscally responsible governance thus reads: Don’t play favorites. Don’t hand out extra-special money-flavored lollipops to the corporations and agribusinesses whose lobbyists are most eager to shine your shoes with their tongues.

The left would like us all to think that this isn’t so, but the “corporate welfare” issue is a problem that cuts across party lines. Republicans and Democrats both love to reward corporations for behavior they find politically desirable. When Obama spoke in his most recent State of the Union address about the need to “invest” in things like “green” technology and high speed rail, he was talking about government subsidies. Few in the private business world believe that “green” technology and high speed rail are worthwhile risks at present; that’s why they are not yet in widespread use. But for our own good, Obama and his Democrat allies want to foist them upon us using our tax dollars. We shouldn’t let them. We shouldn’t let anyone – no matter their party affiliation – attempt to manipulate the natural pace of technological development. All that does is divert much needed resources away from other (more viable) industries.

The Federal Budget, Part III

Critical thinking is often sorely lacking in any discussion of the government’s money woes. As I discussed in the last post, many fail to recognize the ways in which we Americans can work for the public good without getting the federal government involved. Another thing that bothers me in these debates over the debt is the manner in which intentions tend to overshadow results. I like to call this phenomenon the Orphans, Puppies, and Kittens Effect; if a certain government program has a mission that sounds Christian and noble, you will be painted as a baby-eating, grandma-kicking monster if you subject said program’s books to scrutiny.

This is what the liberals and leftists in Washington want to do with your tax dollars – and don’t you dare question them! After all, they are full to the brim with good intentions.

A recent example: Back in December, internet leftists, encouraged by the likes of Jon Stewart, flew into a frothy rage over the GOP’s opposition to a bill that sought to put in place a program to provide medical care to 9/11 first responders. Many of my friends on Facebook were absolutely convinced that the Republicans just wanted to stiff our 9/11 heroes so that the government would have money to spare to give tax breaks to the GOP’s rich buddies. Of course, the true story was utterly different. As one dissenting senator explained:

One of the most significant concerns about this bill is its continued reliance on the National Institute of Occupational Safety and Health to administer 9/11 health programs. NIOSH has sent $475 million in grants to New York to pay for health care benefits. Yet to this day, NIOSH, the city of New York and the various health care providers who received grants have failed to tell Congress where that money has gone. For example, Mount Sinai Medical Center has received about $137 million from NIOSH since 2004. Until they can show where that money was spent, it is irresponsible to give them more.

The proponents of this bill say it terminates the current programs and replaces them with one program run by a single administrator. In reality, the new program administrator would still be NIOSH, the same agency that has inadequately administered the program. Without the basic facts about the programs NIOSH administered for the past eight years, it is hard to design an effective program for the future.

In other words, it wasn’t that the GOP wished to deny 9/11 first responders needed medical care. On the contrary, the Republicans only wished to ensure that the money would actually be spent on those first responders. Imagine that!

For my second principle of fiscally responsible governance, I’d like to propose the following: A program’s mission should not grant said program immunity. ALL federal programs should be reviewed on a regular basis and, if necessary, scrapped or reformed. I don’t care if you really, really love the goal of the Bureau for the Protection of Indigent Widows (not a real program, obviously, but there are many existing programs that are similar in intent). If our theoretical BPIW is spending a lot of money and yet can’t demonstrate that these funds are having a genuinely positive effect on the target group, it needs to be cut or restructured in some way. If our theoretical BPIW is inefficiently run, then we need to make it more efficient. We shouldn’t have sacred cows. And yes, this rule applies to the military as well. If a group of naval experts determines that a proposed new destroyer is flawed and ultimately unnecessary, then we need to trash that project too. I repeat: No sacred cows!

The Federal Budget, Part II

In the last post, I listed what I believed to be the top priorities of the federal government – and as you may have noticed, it was not an exhaustive list of every conceivable public good. That was deliberate. In my view, the federal government cannot – and should not – take responsibility for all of our needs and desires. That way lies fiscal insolvency.

Today, what I’d like to discuss is the concept of federalism. In reality, our government has at least four distinct levels:

  • Federal. Obviously, this is the government which meets and does business in DC.
  • State. There are fifty of these governments, and they all have their own treasuries.
  • County/Municipal. There are literally millions of these governments, and some of them are empowered to collect taxes.
  • Community/Individual. This is not a politically recognized level, but it does matter. We do need to take on the responsibility of governing ourselves in certain matters.

The mentality that I see among many on the left is a mentality that forgets that these four levels of government exist. At most, leftists will acknowledge the federal and the state governments, and they usually assume that if the top two levels don’t take care of something, it’s never going to get done. This is what SABR Matt might term a “failure of imagination.”

My first principle of fiscally responsible governance goes a little something like this: When reviewing an existing or proposed program at the federal level, our leaders should always ask, “Can this be done at a lower level of government? Does the federal government need to get involved?”

Now let’s apply this principle to some concrete examples. I’ll start with arts education for disadvantaged kids since SABR Matt brought it up in his reply to my last post. Can this be done at a lower level of government? Does the federal government need to get involved? My answer to both questions are yes and no respectively. Just for kicks, I googled “charitable groups that bring art to kids,” and at the top of the results page, the “Life Through Art Foundation” popped up. Co-founder and president Jeffery David Brooks has this to say about the genesis of LTAF:

Several years ago, I was teaching children’s theater when a fourteen year old girl stood up and began to recite Shakespeare. She performed Shakespeare with such passion, fire, and uninhibited confidence that I was blown away. I encouraged her to think about attending an arts school and decided that I would do whatever I could to help her achieve her artistic dreams. She recently graduated from Interlochen Arts Academy and is now attending the Royal Scottish Academy of Dramatic Arts on scholarship. Several thousand dollars, countless bottles of aspirin, and a handful of incredible volunteers later, my quest to help one child has blossomed into a dream to introduce the arts and provide meaningful experiences in the arts to as many children as we can reach.

This foundation has become my way of giving back what was once given to me and I have been fortunate enough to find people who share this dream. Whether it is painting, photography, music, acting, or the culinary arts, our goal is to aid young people in both their development as artists and as individuals. With the recent cutbacks in funding for community and school art programs throughout the country, it is particularly important that we do as much as we can to promote and support arts education. I believe that the gift of imagination is the greatest gift of all. With your help we can expand these artists’ minds to spark a new generation of creativity. Thank you for helping me realize my dreams and for opening the door for so many others.

Notice the sentence I took the liberty of emphasizing. Because the government is pulling out of arts education, Brooks feels more motivated to appeal to contributors and volunteers. Regardless of whether or not the government gets involved, arts education will happen for many young people because of this man’s individual initiative. (And by the way, as soon as I have $20 to spare, I’m going to buy one of his t-shirts because his cause is a worthy one – and because I believe in putting my money where my mouth is.)

Another example: The federal and state governments have been under a lot pressure recently to pass legislation designed to curb bullying and cyber-bullying. But can this be done at a lower level of government? Do the federal and state governments need to get involved? Again, my answers are yes and no. Bullying should be handled at the municipal and community levels by parents, principals, and local school boards. Parents have a responsibility to teach their children that bullying is unacceptable behavior; principals have a responsibility to enforce their schools’ codes of conduct; and local school boards have a responsibility to draft codes of conduct that are clear and consistent. We should encourage the fulfillment of these three responsibilities before we start passing upper-level unfunded mandates. Drafting state or federal anti-bullying laws may make legislators feel good, but it is really a waste of time and money.

In the social teaching of the Catholic Church, this idea that we should take advantage of our multi-layer government structure and kick some responsibilities downstairs goes by another name: subsidiarity. The principle of subsidiarity states that all acknowledged public goods should be achieved by the smallest entity capable of achieving them. Yes, in some cases, only the federal government has the resources and/or the constitutional authority necessary to accomplish a particular task, but we should not assume that this is true of everything under the sun.

Moreover, even in situations in which the federal government must take over, our leaders should ensure that they are not simply pitching money into the circular file. More on this later…

The Federal Budget, Part I

SABR Matt has requested that I begin outlining my plan for fiscal responsibility at the federal level, and so I shall attempt to do so (though, to be honest, I find such a task rather daunting).

I think the best way to start this series is to talk about the Constitution and the powers it grants to the federal government. Let’s take a look at Article I, Section 8, which lists the powers of the federal Congress:

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

To borrow Money on the credit of the United States;

To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States;

To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

To provide for the Punishment of counterfeiting the Securities and current Coin of the United States;

To establish Post Offices and post Roads;

To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;

To constitute Tribunals inferior to the supreme Court;

To define and punish Piracies and Felonies committed on the high Seas, and Offences against the Law of Nations;

To declare War, grant Letters of Marque and Reprisal, and make Rules concerning Captures on Land and Water;

To raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two Years;

To provide and maintain a Navy;

To make Rules for the Government and Regulation of the land and naval Forces;

To provide for calling forth the Militia to execute the Laws of the Union, suppress Insurrections and repel Invasions;

To provide for organizing, arming, and disciplining, the Militia, and for governing such Part of them as may be employed in the Service of the United States, reserving to the States respectively, the Appointment of the Officers, and the Authority of training the Militia according to the discipline prescribed by Congress;

To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the Acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings;–And

To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.

Let me try to translate: Of the seventeen paragraphs detailing the specific powers of the Congress, seven are concerned with national defense, five are concerned with economic issues (like establishing bankruptcy laws, maintaining a common currency, awarding patents and copyrights, and regulating interstate and international trade), and two deal with the government’s revenue (i.e., its power to tax and borrow money). There are also mentions of the federal government’s power to decide who may become a citizen of the US, to maintain a postal system, to build roads, and to establish lower courts. The proper priorities of the federal government seem pretty clear here: see to our national defense and foreign policy first, then deal with matters of trade.

Of course, because the left is very slippery, especially when it comes to our trade, I think I also need to briefly explain the context in which the 1789 Constitution was written — in other words, I need to explain the why for the economic clauses in particular. Under the Articles of Confederation, the federal government did not have the power to establish a consistent currency, nor could it stop the states from passing laws which infringed upon the right of other states to do business. This, as you might expect, created chaos in the US economy, as each state was inclined to look out for her own interests instead of the interests of the entire Confederation. (For example, the states could pass laws favoring their own ports at the expense of ports in other states.) One major intention of the Framers in writing the current Constitution was to ensure that within the boundaries of the US, the laws of doing business were consistent no matter your location. I doubt the Framers intended to give the federal government the power to tell us what we should and should not buy, and I’m pretty sure the Framers never imagined that the federal government would one day become the massive regulatory leviathan it is today.

Still, I’m a practical person. I recognize that we will never be able to completely roll back the federal government’s current regulatory power. As a matter of fact, in certain circumstances, I don’t think we should roll it back. There should be a basic workman’s compensation program in place. There should be some basic environmental regulations. I also believe that “general welfare” does apply to things like disaster relief and, yes, Social Security. Thus, if I were asked to create a list of absolutely non-negotiable responsibilities for the federal government, I think it would look a little something like this:

  • Funding our military. There are still people out there who hate us and would like to kill us. Per the Constitution, it is the federal government’s job to make sure that our military remains a robust fighting force.
  • Preparing for and responding to disasters. I believe this definitely falls under the heading of national defense.
  • Funding our diplomatic corps. Because war really should be our last resort.
  • Passing laws to prevent corruption and ensure that all business contracts are honored. This is pretty much a no-brainer. We need to be able to trust each other in order to engage in healthy economic transactions.
  • Passing reasonable laws to maintain our air, water, and soil quality and to conserve our natural resources. We do have a responsibility to ensure that future generations will be able to enjoy a basically clean environment.
  • Passing reasonable laws to prevent the exploitation of workers. I’m certainly no fan of child labor.
  • Maintaining a functional interstate transportation system. Our national economy does depend a great deal on the ability to ship freight. ETA on May 4: Upon reflection, I think I’ll add “maintaining other infrastructure” to the list. Sanitation and electricity are also important.
  • Establishing some very basic educational standards. I’m not asking for absolute uniformity here, but our national economy also depends upon our ability to read, write, and cipher.
  • Maintaining a basic social safety net. We should make sure that our citizens are adequately clothed, housed and fed.
  • Passing any other laws which pertain to the specific powers enumerated in the Constitution.

Notice what’s missing here. The federal government does not have a non-negotiable responsibility to financially support our artistic class, for example. That is a luxury, and as such, it should not be treated as a top priority. (Translation: We need to cut the National Endowment for the Arts. If these artists can’t make it on their own or with the help of private patrons, too bad.)

Moreover, even the responsibilities I list above should have their limits. We should pull our military out of Europe, for example, as all we’re doing there is allowing the nations of Europe to ignore their own defense in favor of bloated welfare states; social welfare benefits should never exceed the benefits of a minimum wage job, as we should be incentivizing work, not dependency; retirement ages should be raised for younger Americans to ensure the solvency of Social Security; etc., etc. In the next posts, I will discuss some specific ways we can impose restrictions even on the necessary functions of our federal government.

A Caveat

While the death of Osama bin Laden is definitely something to celebrate – God bless our troops! – I think we have to be careful not to declare this the “End of the War on Terror.” There are still plenty of bad guys out there who need to be stopped; radical Islamism is still a genuine threat to the USA and to Western civilization. We cannot let our momentary – though well-deserved – patriotic glee detract from our resolve or our vigilance. Our message to Osama’s supporters should remain loud and clear: