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Blog Posted in avatar   Michael F. van Breda's Blog

What really happened to spending?

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By Michael F. van Breda
Posted Aug 27, 2011 in Politics
How many people, I wonder, read the financial reports produced by their cities? How many of us have any idea how our own local government actually spent our tax money? The same is true of the State and the Federal government. Very, very few access and read the actual financial reports. As near as I can tell, there is no one in the press who does. And, it would seem clear, none of our politicians do either. We are treated to headline after headline about the “budget.” We hear heated claims that we must balance the “budget.” Yet we hear not a word about what actually happened to the budget when the actual spending began.
To make matters worse, while Congress might claim to be wanting to produce a balanced budget, needs dictate otherwise. Children fall ill and must be treated; hurricanes happen and must be dealt with. So Congress has all kinds of devious means to circumvent the budget when the need arises. The largest recent example was the Iraq war, which never made it into the “budget” but was dealt with as a supplementary issue on the side. It never made it into the “budget” because that would have bust the budget — which would have made the headlines. Instead, it was slipped through in necessary, actual spending allowances that are essentially ignored by the press and, as a result, by people in general.
Budgeted spending requires one to budget taxes to cover the spending. Non-budgeted spending is simply paid for by borrowing. Because we did not budget for the war in Iraq, which was supported by both parties and by a majority in the country, there was no war tax. The war was off-budget and paid for by borrowing. The result was an increase in the federal debt burden that now has everyone worried.
No one wants to raise taxes. In fact many in Congress have taken a no new taxes pledge. The only way to balance the budget in this political environment is to put some things that will have to be paid for into an off-budget category. When the time comes to actually pay for these things, people’s attention will be focused on the next budget. No one is watching the actual inflow and outflow so our politicians do not have to worry about being criticized for spending on things that just “had” to be paid for. Politicians can claim to have balanced the budget. But all it means is that the federal debt will go on growing year after year. In short, we play games with ourselves.

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