Tax Increases or Spending Cuts?

Republicans are reminding us that the Federal Government has a spending problem, not a revenue problem. With a Federal debt of about 17 trillion dollars and an annual deficit of about a trillion, it certainly appears that spending is outrunning our ability to pay. The imminent budget “sequester” is a miniscule reduction in the scheduled increase in spending even though the Obama administration has tried to describe it as just this side of Armageddon.

But is the problem really one of spending? The sequester will force modest cuts in the amounts spent by the various federal departments and agencies. (For this I’m setting aside concerns about the effects on the military to which the word modest probably doesn’t apply.) Unfortunately, the cuts are done arbitrarily without regard to reasonable priorities. It will force spending cuts, but will it do as much harm as it does good? That remains to be seen. The government is so huge and complex that there are probably less than a handful of people who come anywhere close to understanding it. Inevitably, though, when legislation is introduced to address the objectives of separate special interests, there will be overlap. When agencies become huge and complicated, inefficiencies and waste inevitably intrude. The more opaque the workings of government become, the greater grows the opportunity for fraud.

Expecting that by forcing arbitrary cuts on government we will somehow miraculously address these concerns is hopelessly optimistic.

When Barack Obama first ran for President, he said that he would, if elected, “streamline agencies and get rid of programs that don’t work.” As I remember it, he claimed that he was going to evaluate each program one by one and get rid of duplication, fraud, and inefficiency. A tall order, to be sure. Some would say impossible. At any rate, it hasn’t even been attempted. What we got instead was a proliferation of programs under the guidance of 40 plus “Czars” appointed by the President and unaccountable to anyone but him.

So what we have is not simply a spending problem. We have a program problem. It’s time to create numerous employment opportunities for auditors to identify where there are overlapping programs, cost overruns, programs that have outlived their original purposes, etc. and rid ourselves of such waste. We can’t just hit the budget with a stick and hope that we are squeezing out the noxious parts.

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