MyGovCost News & Blog

Smarter Voters Reject Tax-Funded Sports Stadiums


Thursday June 8th, 2017   •   Posted by Craig Eyermann at 6:45am PDT   •  

Empty plastic seats at stadium, open door sports arena What do the citizens of San Diego, California and St. Louis, Missouri have in common?

In the world of professional major league sports, both cities have recently lost their National Football League franchise, with the billionaire owners of both the San Diego Chargers and the St. Louis Rams decamping for the “greener” pastures of Los Angeles.

But after those actions were announced, both cities’ passionate sports fans have had the opportunity to vote to increase taxes on themselves and specifically targeting any tourists visiting their towns to spend on fancy new sports stadiums.

Having learned from their experiences in dealing with billionaire sports franchise owners, voters in both cities sent those ballot measures down in flames. The San Diego Tribune‘s Dan McSwain weighed in on the outcome of the November 2016 vote in San Diego, where the city’s voting residents sent a clear message to the moneyed-interests looking to tap public tax dollars to fund their stadium scheme.

To be sure, the Charger’s Measure C was far from perfect. It may not have withstood legal challenge, because it came perilously close to the state’s constitutional prohibition against raising taxes for a specific private purpose.

Politically, however, its core strategy was deft. It would have raised taxes on hotel guests only. Because hotels are subject to robust rate competition on most nights, in economic terms this means hotel owners ultimately would absorb the higher cost in the form of lower profits.

That’s why the Chargers attached a convention center to the project. The team could share or avoid big costs on common slabs of concrete foundations, concourses and such.

And this wouldn’t be some empty stadium used just 10 days a year. Tourism dollars would flow from conventions. Why, the project would pay for itself, consultants projected.

Indeed, Measure C effectively offered a $1.8 billion convadium with $1.15 billion coming from hoteliers, indirectly, and $650 million coming directly from the Chargers, its fans, and the NFL.

Fatally for the measure, the team failed to convince the hotel industry, which preferred a waterfront expansion of its existing center. In the late 1990s, the industry had convinced politicians to bill taxpayers directly for the last expansion through the city’s general fund. If hoteliers were going to pay this time around, they wanted to run the show.

Yet the death blow was delivered by voters, 57 percent of whom rejected Measure C in November. We can safely infer that ordinary people understood that tax dollars, even those effectively paid by hoteliers, are tax dollars. Once hiked, taxes can just as easily go to roads, pensions and the poor in San Diego instead of further enriching the NFL.

Indeed, we can probably rule out “not-in-my-backyard-ism.” Voters who lived in downtown precincts—the very people who would live amid the traffic jams and reveling conventioneers from a 15-acre convadium—supported the project by 52 percent to 48 percent, according to data from the county registrar.

No, this was a vote against handouts to billionaires. With, perhaps, a message to the hotel industry.

The story in St. Louis is a little different. There, in April 2017, voters had the opportunity to vote to tax themselves and their visitors to fund the construction of a soccer stadium as part of an effort to bring Major League Soccer to the city. Sports Illustrated reports:

It looks like St. Louis will remain a two-sport town after voters defeated a measure that would have helped pay for a stadium as part of an effort to lure a Major League Soccer franchise.

City voters turned down Proposition 2 on Tuesday by a 53 percent to 47 percent vote. It would have provided $60 million from a business use tax to help fund a soccer stadium.

MLS leaders have expressed strong interest in St. Louis, but only if voters agreed to public funding. The league is expected to award two expansion franchises this fall, both of which would begin play in 2020.

With the vote’s outcome, St. Louis, a city where soccer has long been a hotbed for the sport, effectively pulled itself out of consideration to have a major league professional soccer team, having learned from the bills that the city’s taxpayers will still have to pay for another 10 years to its creditors for building its professional football stadium that no longer hosts a professional football team.

Eventually, voters learn when they’re being played by billionaire team owners looking to profit from getting taxpayer financing and respond accordingly.

Senator Dianne Feinstein’s Quest to Keep California Dry


Wednesday June 7th, 2017   •   Posted by K. Lloyd Billingsley at 11:36am PDT   •  

Despite a wet winter and thick snowpack, California still faces increasing demands for water. New sources are always welcome and the Cadiz project seeks to pump groundwater from private holdings in the Mojave Desert to supply homes in arid southern California. San Bernardino County approved the project but the loudest voice against it is California’s senior senator Dianne Feinstein, former mayor of San Francisco.

“California’s public lands and resources are under siege by a powerful corporation and its allies in Washington,” Feinstein charged in a recent opinion column, describing Cadiz as “a particularly destructive project” that threatens “tortoises and bighorn sheep to breathtaking wildflower blooms that blanket the region.” The project “places a big emphasis on corporate profit at the expense of the broader public,” and it’s a matter of “Republican overreach,” backed of course by the Trump administration, and they seek to “rob us of our public lands.” Cadiz board member Winston Hickox offered a different view.

As California Environmental Protection Agency secretary from 1999-2003, Hickox worked with Feinstein on water issues, and from 1975-1983 he served as governor Jerry Brown’s special assistant for environmental affairs. According to Hickox, the Cadiz project “will conserve enough water for 400,000 Californians each year for 50 years without causing a single adverse environmental impact.” As he notes, it was approved in accord with California’s Environmental Quality Act and prevailed in multiple court challenges. Hickox shot down Feinstein’s use of the U.S. Geological Survey and National Park Service and charged that she used her stature “to misrepresent facts.” Animals and flowers are not at risk, and the Cadiz project, Hickox concludes, “will add a new water supply in a safe and sustainable manner.” By opposing it on a partisan basis, and misrepresenting the facts, Feinstein abuses the public she claims to protect.

Meanwhile, as Cadiz moves ahead, California should consider the example of Australia, a nation with an arid climate and limited water supplies. As Australia’s National Water Commission explained in Water Markets: A Short History, water markets and trading were “the primary means” to achieve the best use of existing resources.

ClimateScience.Con


Tuesday June 6th, 2017   •   Posted by K. Lloyd Billingsley at 9:39am PDT   •  

President Trump has pulled the United States out of the Paris Climate Accord on the grounds that it puts the energy reserves of the United States, including coal, “under lock and key” while allowing other nations to develop their coal resources and coal jobs. The Paris deal is therefore “a massive redistribution of United States wealth to other countries.” The Paris Climate Accord is hardly the first international deal to attempt such top-down redistribution. Recall the “North-South Economic Dialogue,” promoted by the United Nations.

As Paul Johnson noted in Modern Times, 11 of the “South” states, including Mexico, Venezuela and Pakistan, were north of the equator, and one, Saudi Arabia, had the world’s highest per-capita income. Australia, the only continent entirely in the southern hemisphere, was considered “North.” The entire Soviet Bloc, entirely in the northern hemisphere, was omitted altogether. “The concept was meaningless, except for purposes of political abuse,” Johnson wrote, and “inevitably, America was presented as the primary villain in the North-South melodrama.” The same is true of the Paris Accord, masquerading as a climate measure based on science.

California Governor Jerry Brown, at this writing on a tour of China, claims the science is all settled, which was also said of Newtonian physics. Climate alarmism is an orthodoxy, not a matter of facts and inquiry, and those who question it become heretics and criminals to be vilified. True to form, The Nation called withdrawal from the Paris Accord “a crime against humanity,” charging “this is murder, even if Trump’s willful ignorance of climate science prevents him from seeing it as such.”

Such hysteria recalls Squealer, apologist of the ruling pigs in George Orwell’s Animal Farm. When head pig Napoleon steals the milk and windfall apples, Squealer explains that this is not an act of selfishness and privilege but absolutely necessary for the welfare of the wise “brainworkers.” As Squealer contends, “this has been proved by Science, comrades.”

Trump Budget Slows Out of Control Medicaid Spending Growth


Monday June 5th, 2017   •   Posted by Craig Eyermann at 6:24am PDT   •  

41913416 - medicaid torn newspaper headline on cashWhen President Trump unveiled his official budget proposal for the U.S. government’s 2018 fiscal year two weeks ago, the proposal was greeted by headlines such the following from Bloomberg:

Trump to Pitch Deep Cuts to Anti-Poverty Programs, Medicaid

Or the following headline from the New York Times:

Trump’s Budget Cuts Deeply Into Medicaid

The biggest federal government program being targeted for spending reductions in the Trump budget compared to previous budget proposals is the Medicaid welfare program. Here’s how Bloomberg described the cuts in their article.

The upcoming budget request for fiscal 2018, which include dropping the top individual tax rate to 35 percent, is already attracting criticism from Democrats. Trump’s proposal will also call for $800 billion in cuts to Medicaid, the health program for the poor, the Washington Post reported....

During the presidential campaign, Trump promised not to cut Social Security, Medicare or Medicaid. He has already broken that promise on Medicaid by backing cuts to the program called for under the Obamacare repeal bill passed by the House on May 4. The White House has said that the president intends in his budget to keep his pledge on Medicare benefits and Social Security retirement benefits.

To get a better sense of the changes to Medicaid that are actually spelled out in President Trump’s first budget proposal, and how that compares to recent historical spending and President Obama’s last budget proposal, we’ve put the following chart together.

Perhaps the most surprising part of President Trump’s spending proposal for Medicaid spending is how similar it is to what President Obama proposed in the next four years from 2017 through 2021.

After that, the proposed increases in federal spending on Medicaid diverge, where President Obama’s final spending proposal had Medicaid spending increasing exponentially on autopilot at a rate far faster than the nation’s projected economic growth, which puts the Medicaid program onto an unsustainable path.

By contrast, President Trump’s budget proposal sets Medicaid spending to increase at a much more steady and sustainable rate. Here are the main spending trends noted on the chart:

  • From 1993 to 2008, federal Medicaid spending rose by an average rate of $9 billion per year.
  • From 2008 to 2016, Medicaid spending increased by an average rate of $20.9 billion per year. There were two main surges in spending during this period. The first came with the federal government bailout of state Medicaid programs in the aftermath of the great recession, which kept many states from becoming insolvent. That bailout spending ended in 2012, where federal spending on Medicaid declined by $25 billion in 2012 to $251 billion. The second factor driving the increase in Medicaid spending was due to the implementation of the Affordable Care Act in 2013, which expanded enrollment in Medicaid from 58.9 million to 72.2 million, nearly a 23% increase in the years from 2012 to 2016. Spending increased from $251 billion to $368 billion during this period, a 47% increase.
  • From 2016 to 2026, President Obama proposed continuing to increase Medicaid spending by a near exponential rate of $26 billion per year, which would reach $631 billion in 2026. This rate of spending would be almost the equivalent of implementing the Affordable Care Act’s annual spending increases for its expansion of the Medicaid program again every year for the next 10 years.
  • From 2017 to 2027, President Trump proposes increasing spending at an average rate of $14.3 billion per year, which is nearly 60% higher than the average annual rate of increase of $9 billion per year recorded from 1993 to 2008.

More importantly, the numbers contained in President Trump’s first budget proposal directly contradict much of the media’s reporting of the changes in federal Medicaid spending as cuts. But then, that’s Washington D.C.-style thinking for you.

Illinois Charges to Lead in Race to Failed State Status


Friday June 2nd, 2017   •   Posted by Craig Eyermann at 6:50am PDT   •  

12071081 - poor man showing empty pockets in front of american state of illinois flag There is a sad race underway between two fiscally-troubled states in the Union, where the state governments of both Connecticut and Illinois appear intent on becoming the first full U.S. state to file for the equivalent of bankruptcy.

Just over a week ago, Connecticut took a strong step backward toward reaching that status first when all three major U.S. credit rating agencies downgraded the state’s credit, which immediately made it more expensive for that state government to borrow new money by issuing new debt.

This week however, the state government of Illinois, thanks to its unadulterated dysfunction, has stormed back into the lead by achieving something that no other state has: the lowest credit rating ever assessed against a state government! Bloomberg has the story:

Illinois had its bond rating downgraded to one step above junk by Moody’s Investors Service and S&P Global Ratings, the lowest ranking on record for a U.S. state, as the long-running political stalemate over the budget shows no signs of ending.

S&P warned that Illinois will likely lose its investment-grade status, an unprecedented step for a state, around July 1 if leaders haven’t agreed on a budget that chips away at the government’s chronic deficits. Moody’s followed S&P’s downgrade Thursday, citing Illinois’s underfunded pensions and the record backlog of bills that are equivalent to about 40 percent of its operating budget.

“Legislative gridlock has sidetracked efforts not only to address pension needs but also to achieve fiscal balance,” Ted Hampton, Moody’s analyst, said in a statement. “During the past year of fruitless negotiations and partisan wrangling, fundamental credit challenges have intensified enough to warrant a downgrade, regardless of whether a fiscal compromise is reached.”...

The downgrades, which also dropped some debt backed by legislative appropriations into junk, came a day after Illinois’s legislature blew the deadline for approving a compromise budget by a simple majority. Now, it takes a higher threshold—three fifths majority vote in each legislative chamber—to pass anything. On Wednesday, Rauner, who is up for re-election in 2018, and Democratic House Speaker Michael Madigan, who controls much of the legislative agenda, faulted each other for the unprecedented gridlock.

The Bloomberg article goes on to describe the consequences that the continuing failure of the state legislature’s leadership to pass a budget leading to solvency would have if it continues its current dysfunction:

Despite the lack of a budget, Illinois has continued to cover payments due on its bonds, and, like other states, has no ability to resort to bankruptcy to escape from its debts. A downgrade to junk, though, would add further financial pressure by increasing its borrowing costs and preventing many mutual funds from buying Illinois’s securities.

The second part of that passage is right on target, but the first part, while correct today, may be subject to change in the near future. Right now, the U.S. territory of Puerto Rico is blazing the legal precedents that would enable a state government like that of Connecticut or Illinois to enter into similar bankruptcy-like proceedings to have its debts restructured. In Puerto Rico’s case, it’s shaping up to be a messy process.

Given the quality of politicians in power today in both Connecticut and Illinois however, it’s only a question of time before those states will gain direct experience in that kind of messy legal process.

EPAttacks Property Rights


Thursday June 1st, 2017   •   Posted by K. Lloyd Billingsley at 10:49am PDT   •  

In 2012, John Duarte was plowing his wheat field in Tehama County, California, when a government inspector accused him of “deep ripping” the land and violating the Clean Water Act, which declares seasonal “vernal pools” to be “wetlands.” So according to the government, Duarte needed a permit to farm his land, but the farmer, who also runs a nursery business, said he received no such notice. The government prosecuted Duarte and their expert witness claimed the furrows were “small mountain ranges.” Turns out, they were five inches deep, but the government is still coming after Mr. Duarte and wants to hit him with $2.8 million in fines.

Supporters of Mr. Duarte are waiting to see if the EPA under Scott Pruitt will drop the case and scale back the regulatory zealotry of the previous administration. As Mr. Duarte’s lawyer Anthony Francois of the Pacific Legal Foundation told reporters, “The more of your property – your land – that the government considers to be their water, the more you’re at risk of falling afoul of something like this.” As it happens, the EPA is more about attacking property rights and shaking down property owners than actually protecting the environment.

In 2015, the EPA was responsible for releasing three million gallons of contaminated wastewater into the Animas River. This unleashed 880,000 pounds of lead, arsenic and other toxic materials for dozens of miles through southwest Colorado and northern New Mexico. The EPA’s alleged vigilance also did nothing to prevent the Flint water crisis but despite both disasters EPA boss Gina McCarthy kept her job. And as we noted, the EPA has not exactly been forthcoming about what it does with the $6.3 billion it has collected from lawsuits and settlements since 1990. As it happens, the EPA lacks any meaningful accountability. For example, EPA “policy advisor” John Beale claimed to be working for the CIA and pulled off this ruse for nearly 20 years, bilking taxpayers for nearly $1 million and even gaining “retention bonuses.”

President Trump’s EPA boss Scott Pruitt is not short of clean-up projects. He should drop the case against John Duarte, eliminate all regulations that disrespect property rights, and tell the worst zealots: “you’re fired.” That will certify that needed reforms are indeed taking place.

Governor Gasbag Abuses Taxpayers


Wednesday May 31st, 2017   •   Posted by K. Lloyd Billingsley at 4:24am PDT   •  

California governor Jerry Brown has signed off on a $5.2 billion deal that will raise the tax on gasoline, raise the tax on diesel and raise user fees on motorists. Before the Memorial Day weekend, Brown ranted that those who complain about this tax hike are “freeloaders.” This doesn’t deserve a response, but taxpayers may find one helpful.

The tax hike is intended to fix California’s disastrous roads, but maintenance of roads is already part of California’s budget. Trouble is, as we noted, the California Department of Transportation developed a model for the allocation of maintenance funds but abandoned it because it would have reduced more than 100 Caltrans staff positions. Caltrans distributes funding based the previous spending patterns of the region in question, whatever the road conditions. Taxpayers might also recall that for years the state has diverted $1.5 billion in transportation infrastructure taxes to subsidize California’s General Fund bond payments.

Anybody who drives already pays substantial gas taxes every time they fill up, so in no sense are working motorists “freeloaders.” California workers already pay the highest income and sales taxes in the nation, and they are weary of government shaking them down for more. Taxpayers might note that Brown and the legislature made zero cuts to the state’s bloated bureaucracy and failed to trim wasteful spending. Brown and the legislature could have scrapped the $70 billion “bullet train” boondoggle, and $15 billion to dig tunnels under the San Joaquin-Sacramento River Delta. Fixing the roads and building new ones would be a better application for those funds.

As is happens, Caltrans employs more than 3,000 engineers who basically do nothing but Brown is okay with that sort of parasite, common in state government. The first recourse of California’s hereditary, recurring governor, is to punish the workers with higher taxes and fees then abuse them as “freeloaders.” As working taxpayers may recall, this is the same governor who responded “I mean, look, shit happens,” to safety lapses on the new span of the Bay Bridge, a project that came in 10 years late and $5 billion over budget.

$5 Million Flowing to University of California Gun Snoops


Tuesday May 30th, 2017   •   Posted by K. Lloyd Billingsley at 9:09am PDT   •  

While beating the drum for tuition hikes, University of California president Janet Napolitano maintained a secret slush fund of $175 million and tried to block an investigation by state auditors. That was okay with the University of California regents, who hailed the leadership of the former Arizona governor and Department of Homeland Security boss. As it happens, one of Napolitano’s favorite projects is the UC Davis Firearms Violence Research Center and on July 1 that outfit will receive its first $5 million in funding from the state.

That will help compensate for proposed cuts of nearly $6 billion from the National Institutes of Health, which during the previous administration funded what purported to be research on gun violence, including the work of Garen Wintemute, who happens to be the director of the UC Davis Firearms Violence Research Center. He claims his work is based on “science,” but Second Amendment advocates should be wary. According to Wintemute, the Center’s first project will be will be “a survey that looks at who owns guns, why they own them and how they use firearms.” That sounds more like snooping than science. UC Davis Center wants “the names,” and everybody should find that troubling.

In Gun Control in the Third Reich: Disarming the Jews and “Enemies of the State” author Stephen P. Halbrook compiled data on the way Adolph Hitler’s Germany restricted firearms. The Nazis also wanted to know “who owns guns” and they ruthlessly suppressed firearm ownership by disfavored groups. As Halbrook shows, the Nazis used the records of the Weimar Republic, which also suppressed ownership and use of firearms.

According to a Sacramento Bee report, “Wintemute hopes to assess the effectiveness of current laws, including the newly adopted requirement that people who buy ammunition have the legal right to own guns, and of California’s new gun violence restraining orders.” That sounds more like politics than science, but maybe Dr. Wintemute can use the $5 million in funding to answer a pressing question.

Do California’s new gun laws, with their heavy-handed restrictions and database of ammunition owners, resemble in any way the gun laws of National Socialist Germany? After all, Nazi Germany was one of the most repressive and violent regimes in history. We wouldn’t want the Golden State to be like that.

The Deadly Outcomes of Single-Payer Health Care for Veterans


Monday May 29th, 2017   •   Posted by Craig Eyermann at 6:49am PDT   •  

How much has changed at the U.S. Department of Veterans Affairs over the last three years?

That’s an important question to ask on this Memorial Day holiday. Just over three years ago, MyGovCost began covering the secret wait-list, healthcare-rationing scandal at the U.S. Department of Veterans Affairs. Here’s how we described the roots of the scandal at that time:

The rationing scheme involves the use of multiple waiting lists for veterans seeking medical care at a number of VA health care facilities across the United States. Here, a number of facilities have been discovered to be maintaining an “official” waiting list, which is meant to communicate the VA is successfully limiting waiting times to 14 days or less before providing care. But in reality, the “official” waiting list is a fraud, as these facilities would appear to also be maintaining secret waiting lists – ones where the veterans seeking care are effectively placed in a virtual waiting room where months pass before they can even get on a schedule to receive care.

That kind of deception carries a real human cost, as the story first broke in Phoenix, where as many as 40 veterans have died before receiving care after seeking it from the VA as they were placed on the facility’s secret wait list instead. Since that story first broke, it would appear that this secret rationing system has been adopted at a number of Veterans Administration facilities across the nation – something that could only happen with the knowledge and assent of the Department’s administrators.

In other words, the situation being discovered by the public today is not an isolated incident resulting from the actions of a few rogue administrators at a local facility. Instead, it is the result of deliberate actions taken on the part of the department’s top administrators, which we can see by the system of incentives they created to reward those who adopted the secret wait list scheme and punish those who did not.

Three years later, Circa‘s John Solomon describes where things stand for veterans health care in the VA’s single-payer system today after years of the Obama administration’s efforts to whitewash the scandal.

Now three years and more than 100 criminal investigations later, there is overwhelming evidence the VA wait times were in fact systematic, consequential and involved a widespread cover-up to hide the denial of timely care.

Even worse, life-threatening problems persist at VA facilities, like in the nation’s capital where the political debate on fixing the VA has malingered.

Solomon reviews the results of just-released cases investigated by the VA’s Inspector General in confirming ongoing misconduct occurring at VA facilities, which is especially notable for the comparative absence of consequences for the VA personnel who were directly responsible for the misconduct:

While the consequences were real to veterans, they were less so for responsible VA personnel. “The U.S. Attorney closed his investigation without taking any action,” the inspector general reported, meaning the only form of punishment in this case was the removal of four senior managers from the facility.

At least that limited removal is something resembling progress toward the housecleaning that badly needs to happen throughout the VA. All too often, the VA administrators who have been held accountable for the misconduct they oversaw have successfully exploited the government’s bureaucrat-friendly Merit Systems Protection Board to either overturn their removals in court or to deny any consequences altogether.

That lack of real accountability for the VA’s rationing of medical treatment is pervasive, which has become clear through the sheer scope of the problems that have slowly emerged since the first reports of the scandal broke.

Hospital by hospital, the numbers of veterans who died awaiting treatment continues to mount. At the Phoenix VA, which became the poster child of the VA wait time scandal, things haven’t improved much.

A report last October found that 215 vets died while waiting for care in 2016, specifically chronicling the story of one veteran whose death could have been forestalled if could have gotten cardiac diagnosis and treatment....

Meanwhile, tens of thousands of pages of internal reports that have emerged in the last few months make clear the VA delay scandal that emerged in 2014 was no Mickey Mouse matter but rather a true crisis of life and death.

Solomon’s “Mickey Mouse” comment refers to former VA chief administrator’s Bob McDonald’s infamous comments describing the wait times for medical treatment at VA facilities as being similar to those at Disney theme parks, which followed former President Obama’s attempt to minimize the seriousness of the VA’s problems that exploded across the nation on his watch.

Those problems arose specifically because of the perverse incentives and the government-granted monopoly power that the VA’s staff and administrators have in being the only source of health care that many U.S. veterans can access.

The first step toward fixing what ails the VA is to follow through the reforms that will break the VA’s near complete monopoly on providing medical treatment to America’s veterans and to more effectively impose accountability on its personnel for their misconduct. The VA needs to stop being the literal dead end for health care for America’s veterans.

With new leadership, the VA has the opportunity now to seriously correct its multiple deficiencies. But the longer these same ongoing problems persist, the more it will make sense to pursue actions that will permanently curtail the power of the VA’s bureaucracy and break its near monopoly, where we would argue that what matters most is providing veterans with the ability to pursue medical care wherever they choose, where the VA itself should refocus its health care provision activities to only provide specific and highly specialized care for conditions that are uniquely shared among veterans.

The Three Most Interesting Numbers in President Trump’s First Budget


Saturday May 27th, 2017   •   Posted by Craig Eyermann at 2:11pm PDT   •  

Before diving into the more interesting numbers in President Trump’s first official budget proposal, let’s ask a budget-history trivia question: When was the last time that any U.S. president proposed a federal budget that would be balanced within 10 years?

If you guessed President George W. Bush in 2007, you’re right!

Now, suppose you ask: When was the last time that a U.S. president proposed and delivered a balanced budget? For the answer, you would have to go back to 2000, when President William J. Clinton’s final federal budget proposal for the 2001 fiscal year produced a budget surplus.

It’s important to consider these two dates because it’s been nearly 10 years since a U.S. president even proposed a budget that would reduce the government’s annual spending deficit to zero within a ten-year period, and it’s been four whole presidential terms since a U.S. president’s budget actually delivered a surplus to the U.S. Treasury.

That makes zero the most interesting and important number in President Trump’s first budget. Sure, he gets there through the same kind of questionable accounting and optimistic assumptions that characterizes virtually all budget proposals coming out of Washington, D.C. But when you consider that President Obama’s 2017 budget was projected to leave the federal government over $9.4 trillion more in the hole after 10 years, with ever escalating budget deficits setting in after 2018, President Trump’s first budget proposal represents a notable step toward reversing what would otherwise be the government’s deteriorating fiscal condition, even with its apparent deficiencies.

The next most interesting number in President Trump’s first budget is 66. That’s the number of federal government programs that the president has targeted to be eliminated. Although getting rid of these programs would reduce the annual spending of the U.S. government by just $26.7 billion out of an annual budget of more than $4 trillion, these are exactly the kind of programs that should be eliminated, because what they do is either unnecessary or is duplicated more effectively by other federal spending programs. That they have persisted so long after their useful contributions to the American people have diminished is attributable to the power games of Washington, D.C., where they have largely become vehicles for channeling money to the parochial pet interests and campaign contributors of the politicians who champion them to demonstrate their power and influence.

The third number of interest in President Trump’s first budget proposal is $1.7 trillion. That is the amount by which the U.S. government’s total spending will have increased above 2017’s projected spending level of $4.1 trillion to reach its projected level of $5.7 trillion in 2027. To get there, the U.S. government’s spending will increase at an average annual rate of 3.5 percent over the next decade.

To put that number into historical context, in the ten preceding years from 2007 to 2017, federal spending rose from $2.7 trillion to $4.1 trillion, which works out to be an average annual increase of 4.1 percent. President Trump’s proposed pace for increasing federal government spending is just 0.6 percent slower than that!

Now, if you want to understand why so many politicians and political pundits are howling about President Trump’s budget “cuts”, President Barack Obama’s final budget proposal would have had the U.S. government’s spending increase from $4.0 trillion in 2016 to $6.5 trillion in 2026 for an average annual increase of 5 percent, an unsustainable acceleration of spending growth that the Congressional Budget Office was already projecting would cause the U.S. government’s fiscal situation to significantly worsen.

Apparently, a lot of politicians and pundits either don’t think that’s much of a problem or don’t believe that they would be on the hook for causing that problem. But that’s typical Washington, D.C. thinking for you.

Facebook Twitter Youtube RSS

Search


By linking to Amazon.com from this page, Independent Institute earns referral fees of 4% to 15% from whatever you buy. Bookmark the above link and you can support the Institute when you do your normal shopping!

TIR
June 2017
S M T W T F S
« May    
 123
45678910
11121314151617
18192021222324
252627282930