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Saturday, July 30, 2011

Baseline budgeting.

Just in case you wonder why budget cuts always lead to more spending, you need to understand "baseline budgeting." I'll let Mark Steyn explain:
Washington created its own form of fantasy accounting: "baseline budgeting," under which growth-in-government is factored in to federal bookkeeping as a permanent feature of life. As Arthur Herman of the American Enterprise Institute pointed out this week, under present rules, if the government were to announce a spending freeze – that's to say, no increases, no cuts, everything just stays exactly the same – the Congressional Budget Office would score it as a $9 trillion savings. In real-world terms, there are no "savings," and there's certainly no $9 trillion. In fact, there isn't one thin dime. But nevertheless that's how it would be measured at the CBO.
Baseline budgeting assumes that the budget will grow say, 7% each year, and any budget that arrives at a figure lower than that is called a "cut." The baseline budget allows politician in Washington to spend more money every year while lying to us about their frugality.  The fact is that none of the budget proposals being debated are going to save a penny.  They're only fighting over how much more they will spend and who is going to be paying for it.

Our only hope for meaningful reform is the election of 2012.

1 comment:

thisishabitforming said...

Its always important to define terms. To us regular folk a cut in the budget means less than before.

In Washington, not so much. It means pictures of starving children and accusations that Republicans want people to die if we only want to spend the same as last year.

Spending the same as last year is reality to many of us, and if we can save a little that's even better.

So how to get those entrenched in Washington politics to read the same dictionary as the rest of us? How about 2012?