Friday, September 25, 2015

In The Long Run

I had a long technology-assisted political conversation with my son yesterday. We disagreed on a lot. He made some good points. I made some good points. But, we still disagreed. Our disagreement wasn't on strategy, but rather tactics. We both want mostly the same thing...a better country. Our differences come with how best to make the country better. My primary concern seems always to be the precarious, house-of-cards condition of our national finances. He, on the other hand, always assures me that his favored solutions will either actually save us money, or will be cheaper in the long run. Ahh yes...the long run.

I have been paying attention to politics and finance for the better part of 35 years now, and if I had a dime for every time I heard a politician promise that his bill would wind up saving money in the long run, I could retire right now. To give but one example, back when Medicare was introduced in 1965, its proponents predicted that by 1990 the total cost for the program would run around 19 billion dollars. It wound up being 110 billion, but luckily most of the politicians who made the 1965 prediction were all safely dead. 

So when your preferred presidential candidate in 2015 begins touting his or her proposals as "cost savers" you better grab ahold of your wallet. History hasn't been kind to government budget forecasters from either party. What evidence do I have for this? Well, I've got 18 trillion articles of evidence. Right now the bill for the interest on that debt gobbles up 7% of the budget. Imagine how fast that percentage will climb when the FED has to start raising interest rates? Right now the Congressional Budget Office projects (there's that word again! ) that interest payments on the debt will be the fastest growing part of the federal budget. Nice.

Despite our debt woes and our inability to balance our budget, politicians from both parties are still quite eager to dream up more wonderful ways to spend money on an entire laundry list of projects, all that will actually save us money in the long run. Ok, alright. I get it, I really do. If you make your living driving trucks, you...drive trucks. If you make your living as a politician, you...spend other people's money. So, since that fact of Washington life will never change, how about we add a new requirement for all politicians. Any new government program that requires new spending authorization will only be permitted to the extent that an existing spending authorization is eliminated. For example, if candidate A. proposes a 10 billion dollar plan to provide, oh, I don't know...flat screen televisions to the blind working poor, then in order for the bill to pass, he  or she will have to propose eliminating a 10 billion dollar military base in Guam, or cancel 10 billion dollars from the IRS Christmas party budget. Now, this won't  actually pay down the debt, but it will stop the bleeding and force our leaders to prioritize. Are there constructive things that the government can do to help people? Yes, of course, but first how about we shut down the Federal Helium Reserve, or maybe stop spending 300 million dollars on a blimp for the Army, only to decide we didn't need it after all? Or how about we ask General Electric, one of the richest companies in the world to actually pay taxes, or maybe Facebook shouldn't be getting 300 million dollar tax refunds from the IRS.

But Doug, but Doug, you're talking about 10 billion dollars in a 3.4 Trillion dollar budget. That's peanuts! Yes, I know. But, 10 billion here, 10 billion there and pretty soon you're talking about some real money! And in the long run, you wake up one day and you're $18,000,000,000,000.00 in the hole.