The Government Budget Problem Explained

A fellow bridge player asked me about the state funding problem for the University of Wisconsin System and we said to solve the problem the state will need to go where the money is. The number of college age students is going down and trying to solve that by eliminating a couple of tiny two-year campuses is like trying to save the Titanic (the ship, not the movie) with a teaspoon. Something like four-year campus needs to go. Warming to our subject, we said the same is true for the federal government where you need to go after entitlements. Our interlocutor, being a good leftist, said what about defense. The point is that everybody wants to cut government spending but precious few are successful.

As evidence of what you should cut go to The Dispatch and read Scott Lincicome’s post: The Farm Bill Is A Case Study In What’s Wrong With Washington. Scott’s posts are worth more than the price of a subscription. The GOP is trying to end the Department Of Education. We are going short on the success of reducing either the farm bill or the DOE. Why? Here is Jim Geraghty from NRO’s Morning Jolt (paragraph break deleted):

Believe it or not, a federal agency — well, technically a standing advisory committee — is actually shutting down for good. Ryan Young, a senior economist at the Competitive Enterprise Institute, notes that the U.S. federal government’s Board of Tea Experts — no, that is not made up or from The Weed Agency [A MUST READ] — is formally ceasing to exist, in response to the Federal Tea Tasters Repeal Act of 1996. The board “was responsible for making recommendations to the Secretary of the Treasury to fix and establish uniform standards of purity, quality, and fitness for consumption of all kinds of teas imported into the United States.” Young notes the closure “only took 27 years!”

Everyone should read Jim’s The Weed Agency to realize how difficult those successes are. The link to Ryan is just a tweet (or an Xeet?) so there aren’t any details. We shouldn’t dismiss those small successes but they are incredibly difficult and require Congress critters to be focused on finding ways to cut the budget. Most are not focused on cuts and that is the problem. Budget cuts are in the would be nice category that rarely get accomplished.

Congress: Act On Climate Change

We live in a time of political failure. And then we looked up some definitions of politics. They are really broad because the term politics covers a vast area. So we are leaning towards Congressional political failure. As section one of article one of the Constitution says, all legislative powers shall be vested in the Congress. The Congressional political failure we are interested in today is what we would liken to arbitrage. One recent president wrote a book called the Art Of The Deal but it turned out he wasn’t very good at political deals. The US is a constitutional republic so we send representatives to Congress to represent our interests. Our Congress critters have a challenge because few districts are unified on any issue. Add political parties, the news media, and other influences and it is easy to see the challenge Congress faces in trying to legislate.

We also included this post in the category of 2024 presidential election because whoever wins will be the leader of that party. It is not because the president will issue executive orders. Each party negates the other party on these so they are a particularly bad idea because businesses don’t know how to plan for the future. The president will need to be part of the process to convince Congress to act to create expectations for the country. Do you have any confidence the current president, The Frontrunner, or the former president, The Donald will be that person?

The general problem is discussed by Glenn H. Reynolds (aka InstaPundit) post at the Post: Our Society’s Top Brains Have Gone Mad- And Dysfunctional Politics Is The Result. You should read it all although we’re not convinced on the Nazi part of this:

Communism and Nazism started as intellectual movements; so did such fads as eugenics and lobotomies.

We see the direct link between Marx and Communism. The connection of intellectuals to Hitler and the Nazis seems less clear.

The specific Congressional political failure we are interested in today is Climate Change. Kevin D. Williamson is also posting at the Post with Climate Change Activists Have Failed To Score Public Support. You should read it all. You should also subscribe to The Dispatch to read more of Kevin’s stuff. Kevin identifies the problems with the Climate Change activists and concludes with:

It isn’t that climate activists aren’t selling their agenda — it is that voters in democratic countries around the world are not buying it.

Of course, as Glenn’s title points out, these alleged top brains have gone mad so a political solution is hard for them to accept. Still, it is up to Congress and legislative bodies in other countries to legislate. We are willing to compromise but here is our four-part proposal to start the discussion:

An equivalent carbon tax to replace the gas tax
Elimination of all energy specific taxes and requirements
Finding a way for infrastructure to actually get built
Improvement in forestry practices to reduce wildfires.

We’ll even tell you where we are willing to compromise. First, we will go higher on the carbon tax. Double the current gas tax is in our range although we might need to find a way to support poorer folks as the tax gets onerous. One idea would be to start FICA taxes at some number above zero.

Second, we know we won’t get elimination of ALL energy specific taxes and requirements. We doubt the government could even find all of the incentives for inefficient energy. We’re willing to eliminate all of the carbon specific incentives like percentage depletion as long as some of the inefficient energy incentives get curtailed. Of course, normal deductions that apply to all businesses like cost depletion and accelerated depreciation are not within our compromising range.

Third, finding a way for infrastructure to get built is a challenge without voiding individual rights. We don’t know the solution but we need to find a way to improve the process. The same is true for forestry practices. We need to get better.

We await alternative proposals. Congress needs to get to work.