« Food for thought | Main | Peculiar political about-face »
December 20, 2005
In the interests of truth in government
Are you familiar with the Starve the Beast ideology of conservatism?
The idea is that you drain the federal government of resources (perhaps doing so in ways that are politically popular, like cutting taxes, or in ways that are sold to the American public as crucial to our national security, like the war in Iraq). Then, of course, you are forced to cut spending programs because you simply don't have the money to fund them.
The only problem is that cutting those programs can be politically expensive (unless, that is, you work to disenfranchise the folks who are most seriously hurt by those cuts, like minorities and the poor). So, instead, you run budget deficits funded through borrowing and increasing the national debt.
Of course, that doesn't really solve your problem for you because those debts still have to be serviced. It's just a nifty way of deferring the pain until after your own political career is over.
Now, every year, the Treasury Department (with help from the OMB) is required to submit financial statements to Congress and the President, and the GAO is required to audit those financial statements. I'd like to share a few items from GAO Comptroller General David Walker's statement.
First, it seems that the federal government is indulging in its own questionable accounting, so that Mr. Walker was unable to vouch for either the accuracy of the data or the thoroughness of the audit. All things considered, that's pretty significant. Imagine Enron, only with the federal treasury funded by taxpayer money.
Next, the report notes that the federal government's operating expenses increased by about 23% between fiscal 2004 and fiscal 2005. So much for starving the beast.
Currently, the federal government gross debt according to those fudged statements is $8 trillion as of September 30, 2005 (the end of fiscal 2005). However, that doesn't include "such items as the gap between the present value of future promised and funded Social Security and Medicare benefits, veterans’ health care, and a range of other liabilities (e.g., federal employee and veteran benefits payable), commitments, and contingencies that the federal government has pledged to support. Including these items, the federal government’s fiscal exposures now total more than $46 trillion... ."
Ouch.
These numbers don't include the costs of recovery from this year's Gulf Coast hurricanes or the wars in Iraq and Afghanistan, either.
I'm reminded of what House Majority Leader Roy Blunt was quoted by the Washington Post as saying earlier this week about the "right approach" to taxes — that is keep taxes low to grow the economy which will result in increased Treasury Revenues.
Sadly for us (and for our grandchildren), that is not what appears to be happening. What appears to be happening is something similar to what would happen if you gave a credit card to an eight-year-old. Except that, at least with a credit card, there's a credit limit.
Grab hold of something. Eventually, somebody is going to have to clean up this mess and it won't be pretty.
Posted by The Journal Blogger at December 20, 2005 05:11 PM
