Baseline budgeting

[Ron]

How come we never hear any politicians recommending we get rid of this stupid accounting rule?

If we just froze our budget at the current levels for several years we would be in better financial shape.

If all budget items had to be re-approved yearly/every two years or every four years it would be easier to cut out waste and fraud.

Instead we have a zombie budget that grows exponentially every year, it is insane!

 

[geronimotwo]

makes too much sense, is the problem.

i'm going nuts over the thought that we need to add an amendment that tells us the budget must be balanced.  isn't that the whole point of a "budget"?

[Monkeyleg]

What is it that we need today that we didn't have in 2008? We've drawn down in Iraq, and Afghanistan isn't consuming anywhere near the money Iraq did. There can't be two or three times as many people on SS now as then.

So where's the new money going? Just paying interest on Obama's new debt?

[AJ Dual]

A Constitutional Amendment that did away with all the accounting "tricks" might be even better than a balanced budget amendment.

[kgbsquirrel]

A Constitutional Amendment that did away with all the accounting "tricks" might be even better than a balanced budget amendment.

To easy to bypass. They just rename all those "tricks" and keep doing them or work some sort of bypass to the same effect. Look at how well the 27th Amendment worked.

[wmenorr67]

Then unemployment would go even higher because all of the lobbyist would be out of work.

[birdman]

What is it that we need today that we didn't have in 2008? We've drawn down in Iraq, and Afghanistan isn't consuming anywhere near the money Iraq did. There can't be two or three times as many people on SS now as then.

So where's the new money going? Just paying interest on Obama's new debt?

The bulk of the $600B difference (see my other thread posts) between 08 and 10, was concentrated in welfare/unemployment and expansion of Medicaid (remember, they extended it to 99 weeks as part of the "stimulus"...because paying people no to work stimulates the economy...right?) which consumed $250B a year (increase), SS and Medicare consumed about 280 or so in their increases, and the remaing 100B was spread around various agencies (note, that adds up to 630, because DOD and the wars cost less in 2010 than 2008).  In the "reverb" thread, I posted more of the details.

Basically, the "temporary" stimulus added $300-400B a year 2008-2011...and is now part of the baseline.

The thing that pisses me off, both TARP and the 2009 stimulus were advertised by congress AND THE PRESIDENT as being temporary...(implying spending would decrease after they were done), however, the opposite has occurred, and of course, there is no accountability.

[Ron]

Even the plan the most fiscally conservative congressmen/women are pushing is not a plan with real cuts. It appears all the plans under discussion are nothing more than reductions in the rate of growth. The budget still grows, just not as fast.

http://townhall.com/columnists/stevechapman/2011/07/31/washingtons_budget_theater

[birdman]

Even the plan the most fiscally conservative congressmen/women are pushing is not a plan with real cuts. It appears all the plans under discussion are nothing more than reductions in the rate of growth. The budget still grows, just not as fast.

http://townhall.com/columnists/stevechapman/2011/07/31/washingtons_budget_theater

True, but it's a step.  CATO published a number of analyses that show even a reduction in growth to appropriate levels can achieve what we want in the long run.  Normal GDP growth is about 5-6%, normal inflation about 3% (so a real growth of 2%).  Even assuming this years stupefyingly large spending as a baseline, an economic recovery (e.g. Tax receipts at normal levels, while keeping the pro-growth "bush" tax reductions in place), holding spending growth to inflation would yield a balance in less than 15yrs.  If we could go to pre-stimulus spending (effectively, 2008 plus 3-5% growth from there to now as a baseline, or $3T instead of $3.5ish), balance would be achieved before 2020.  If we could make the necessary entitlement modifications as well, and ensure pro-growth policies (to maintain 5-6% GDP growth), and ensure spending maintains levels about 2-3% below growth, we would balance before 2020, and fully retire the debt by 2040.  My numbers may be off, but this is basically the Ryan plan, combined with further entitlement reform.  Even accounting for SS growth (though adjusted retirement age, means testing, and other proposed reforms) doesn't make a big hit...(it's Medicare/Medicaid that are the long term killers) BUT WE HAVE TO RESTRAIN SPENDING GROWTH AND ENSURE PRO-GROWTH GOVERNMENT POLICIES

The number one thing retarding growth right now is instability...speaking as a former and current business owner, it clouds hiring and growth (acquisition of capital, expansion, etc) to have thenimpact be unknown a few years out (what new regulations are coming, what are future tax rates, etc)...the federal government may think that out-year money is BS, but businesses dont.

[Waitone]

This is exactly the reason establishment republicans are in trouble.  They continue to play the DC game by the sames rules as democrats.  The thought that the games are designed to deceive Joe and Martha Sixpack did not enter into the equation.  As far as establishment republicans are concerned they have finally put one over on establishment democrats.  Thus the grand game continues.  Meanwhile within the republican party is a group of legislators who will not play the game by established rules.  They will attract lots of condemnation but so what.  The usual incentives of plush retirement, guided investments, and help in financing future campaigns are ineffectural. 

The game is completely understood by now thanks to alternative media.  Baseline budgeting is a fraudulent attempt to deceive Joe and Martha.  Years ago alternative media exposed current services baseline budgeting.  We've seemed to forgotten that particular sleight of hand.  The true definition of "reductions" is Figure B is less than Figure A.  TEA party type understand this.  Washington elites don't.   

[HankB]

Before the election, Boehner said - repeatedly - that as a first step, the Federal budget should be reset to 2008 levels, without TARP, stimulus, or any of that other nonsense.

He hasn't mentioned that again between crying jags, has he? 

[longeyes]

it is only in the interest of the American people, that's why, and we do not count.  The public treasury is not for us, it is for "them." 

[brimic]

Hmm overspending and racking up debts, creating new debt to pay off old debt while continuing to overspend.
Sounds like a 'legalized' form of check kiting to me.

[kgbsquirrel]

Hmm overspending and racking up debts, creating new debt to pay off old debt while continuing to overspend.
Sounds like a 'legalized' form of check kiting to me.

Basic rule of "civilization."

If a private citizen does it, it's a crime.

If the government does it, it's business as usual.


(Yeah, I'm feeling extra-cynical today.)

[makattak]

To easy to bypass. They just rename all those "tricks" and keep doing them or work some sort of bypass to the same effect. Look at how well the 27th Amendment worked.

True. How about we require the US government to follow the same accounting standards they require Wall Street to follow? No specific language on what must be required, simply that congress must follow the same rules. (It'd be nice to apply that same logic to LOTS of areas for congress and the federal government.)

Bind their hands- you can fudge your numbers but then you allow Wall Street to do the same. They'd have to give up regulatory powers in order to lie to the people. I don't know which would win out, but I'd like to see the struggle.

[longeyes]

Progressivism requires the perpetual increase of spending.  Attack the baseline and you attack the core of liberal economics.  They will fight that to the death.