I wasn’t sure where to put this, but I think (I hope) GD is appropriate.
Here in the US, for about as long as I can remember (I’m 32 now), the federal government has always spent more than it takes in. There was a brief moment in the mid 90’s where the budget was balanced, but that didn’t last very long.
And so, I wonder, is it possible to have a government that mostly runs on a balanced budget? I say mostly because I know there are times when deficit spending might be necessary, like say during a war, or if some emergency spending comes up, but on the whole, why doesn’t it seem possible to create and keep a balanced budget?
Is that that politicians are so greedy, funding their own pork? Is it something inherent in our system? Or a little bit of both?
Of course with GW (who I feel is an embarrassment to my party) in the White House, this isn’t likely, but if we got a president who actually believed in less spending, and a congress who actually cut a lot of pork barrel spending, could we get, and keep a balanced budget? Or are we doomed to constantly be in debt? I’m afraid it’s the latter (yeah, we had a balanced budget, but it didn’t last), but what do you think?
Also, what’s the situation like with non US governments? South American, European, Middle Eastern, etc… Are there countries that usually have their budgets balanced? If so, how do their economies differ from ours? Thanks.
<This is Master Control, I found the ship, it’s at the very bottom. I’m attaching the chains now. OK, pull her up. We’ll get her back on top of the water and see if she stays afloat, or if she sinks again.>
It is because politicians tell voters they can have lower taxes and more spending on programs they want. Voters get used to it, and rarely elect a politician who tells the truth; the vast majority of voters are stupid that way.
First, completely forget the notion that pork is responsible for deficits. That idea is simply laughable. We are heading for a deficit this year that is somewhere in the neighborhood of $400 billion – the numbers are fluctuating at this time, but somewhere in that area – with total government spending totalling around $2.6 trillion.
Citizens Against Government Waste, a group which takes a laughably broad view of what constitutes pork, estimates that there is about $27 billion in pork barrel spending this year. Blaming pork for a budget deficit is like Ken Lay blaming his wife for the bankruptcy of Enron because she didn’t clip enough coupons.
I basically agree with Fear Itself. People don’t really care about deficits. Its too removed from their everyday lives. It is like worrying about the price of tea in Thailand: in the short run, deficits make zero difference to anyone’s lives. On the other hand, increasing taxes, cutting government programs, and that sort of stuff make an immediate impact in people’s lives, because it either takes money out of their pocket or puts someone they know out of a job. In other words, people think the problem isn’t that bad, but the solution to it is.
Canada’s been running balanced budgets for 8 years now. In fact, I would suspect that the first party to run a deficit will face a fierce reprisal in the following election. On the other hand, the provincial Liberals in Ontario have seemed to have gotten away with it.
Adding a bit more to** Rysto’s ** point, Canada has, in fact, not only been running balanced budgets since 1997-1998 but has actually been generating budgetary surpluses. This has led to an approximate 30% drop in the federal debt to GDP ratio. For better or worse, I think it is fair to say that this approach to fiscal policy has taken hold at the federal level in Canada.
You have a good point. However after the 94 elections when Republicans took over and implemented the Contract With America, shortly after, we had a balanced budget and nobody seemed too worried then. In fact, most people were pretty happy about it. However, it was short lived because Bush came in, and spent a little extra here, a little extra there, and then there’s the cost of the war. I’d like to think that once all of this is over, who knows how long that’ll be, we could have a good chance at rebalancing the budget, but I don’t know. It seems like instead of checking how much money is available before increasing spending, or giving the President an extra X billions of dollars, they just vote on the spending and worry about the funding for it later.
It all depends on what you call pork. Bush signed a $190bn farm subsidy bill over 10 years so farm subsides alone would count as 2/3rds of that $27bn. Cotton subsidies are $4bn, The war on Iraq costed $300bn. It’s arguable how much of that was neccesary and how much was pork. The airline bailout post 9/11 was $15bn, and the recent United trial means that the PBGC assumes an extra $8.5bn worth of pensions. It’s looking increasingly likely that the govt is going to have to step into that mess as well. GM and Ford also look increasingly like they’re going to default on their pensions as well which is yet another expense that has to be accounted for. Medicare and Social Security can be viewed as essentially one huge pork barrel for the sick and elderly.
A couple of billion here and there and you got real money!