To Control Spending, We’re Going To Need To Make Changes To The System

After reading the post below by Jayson Javitz, RWN reader Joe R. opines:

“Republicans spend more than they should, but not as much as Democrats would” hardly leaves me with a warm, fuzzy feeling.”

Dittos to that.

But unless changes are made to the system, we’re going to continue to see large deficits for the foreseeable future.

There is a reason why I say that: It’s because spending more government money brings great political rewards while spending cuts are punished politically.

Most Democrats are by nature tax and spenders and most Republicans, while being in favor of spending cuts in the abstract, are not in favor of spending cuts that actually effect them. How many diehard 65 year old Republicans do you hear calling for cuts in Social Security? You know any conservative vets calling for less to be spent on Veterans benefits? Even Republicans, whether they admit it or not, like legislators who bring home the bacon. So there really is no constituency at the local level clamoring for legislators who’ll bring home a smaller slice of the pie as long as taxpayers in other states are picking up the tab.

Furthermore, you have to consider the political dynamics of spending cuts vs. spending increases.

Usually, spending increases benefit specific groups who may show their appreciation with votes and campaign contributions when a politician showers them with the public’s lucre. On the other hand, who’s penalized by spending increases? All of us, but in relatively small amounts, which leads to there being minimal electoral penalties for wasting our tax dollars.

In other words, if Robert Byrd theoretically manages to attach a provision to a bill that leads to a lot of West Virginia coal miners getting college scholarships for their kids at a cost of $300 million dollars, the coal miners will be thrilled with him, but the taxpayers paying for those scholarships won’t get angry. That’s because there are so many ridiculous pork barrel projects being rubber stamped by Congress that they won’t be able to pick that one out the pack. As a matter of fact, 90% of the population will probably never even find out about the spending in the first place.

But, the flip side of this is if Republican Candidate X runs against Byrd for the Senate in 2006 and calls for repeal of the “scholarships for coal miners act,” the coal miners are going to respond by voting for Byrd and sending him campaign contributions. Moreover, Candidate X is going to get nailed with campaign commercials accusing him of wanting to prevent kids in West Virginia from getting an education. On top of that, don’t forget that most of the tab for these scholarships is being picked up elsewhere. So the reality is that most people in West Virginia, whether they’re Republicans or Democrats, are going to be saying to themselves: “This is a good deal for us. Why would we want to give this up?”

This is what people who are serious about fiscal responsibility are up against and why it has been almost impossible to rein in government spending.

Now, I know some of you are probably thinking: “Wait a second, what about the Clinton years? How was spending gotten under control then?”

There was a unique set of circumstances at play during the Clinton years. You had a democratic President and a republican House that had a sizable, conservative, freshman class in 1994 that was elected in large part because of opposition to Clinton and the fiscal responsibility that they promised in the Contract with America. So they fought Clinton tooth and nail on every new spending proposal (and some of them, like Hillarycare, would have been titanic, budget busting monstrosities).

Of course, if we had a republican Congress and a democratic President today, we would probably see less spending, but given how in vogue triangulation has become, I think we might simply see Republicans offering up smaller spending proposals than the Democrats instead of fighting to block new expenditures as they did during the Clinton years.

So what can be done? Democrats openly believe in big government, Republicans talk tough about cutting spending and then usually don’t do it, and Libertarians don’t ever get elected. So no matter which Party you support, you’re only going to get more spending.

The only long-term solution to the problem is to try to fix it legislatively with some sort of Balanced Budget Amendment that forces fiscal responsibility upon our legislators. One thing that would make a big difference would be a Tax And Spending Limitation Amendment of the sort proposed by Milton Friedman in my interview with him:

Milton Friedman: What we should consider and what has been considered is a Tax And Spending Limitation Amendment, an amendment to hold down total spending. I don’t think it needs to be in the form of a Balanced Budget Amendment, but that’s one form it can take.

John Hawkins: So would you favor for example a 3/5th’s majority to raise taxes like they suggested in the “Contract with America”?

Milton Friedman: Yes, but the example that comes to mind really is the Colorado Tax And Expenditure Limitation Amendment that requires the spending to increase no more from year to year than population and inflation. Also, it requires that any revenues in excess of spending have to be returned to the taxpayers.”

Of course, making changes that would keep Social Security & Medicare costs under control would be helpful as would term limits, which would insure that we had legislators who were more concerned with doing the right thing for the country than getting reelected.

Government spending can be controlled, but we’re going to have to do more than shake our fingers at Washington and admonish them to work harder to save our money. If we want to see realistic, long-term fiscal responsibility, we’re going to have to change the system.

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