As we listen to our government officials at all levels, we hear many talking about spending cuts. But, are they really cuts?
For example, in Maryland, if I add-up all of the so-called spending cuts made during the past 7 years, taxes should have decreased by $3 Billion, and individual tax bills should have decreased more than a thousand dollars a year per taxpayer.
Of course, that is not what has happened. Taxes increased: Income taxes, property taxes, flush taxes, rain taxes, fuel taxes, toll taxes, sales taxes, vehicle taxes, food and beverage taxes, bottle taxes, bag taxes, title taxes, death taxes, healthcare taxes. You name it.
This raises an interesting question. If the government is making all of these “Spending Cuts,” why is the government continuing to grow, and why are taxes continuing to increase?
The answer will anger you. The average salt-of-the-earth common-sense citizen knows what a cut is. If this year I spend $100, but next year I spend only $99, it’s a cut.
So what’s happening?
- The first is something I refer to as the fallacy of buying bananas versus oranges. If government decides to buy fewer bananas, but more oranges, it issues a press release saying it has cut spending on bananas, while failing to mention it is now spending more on oranges. Of course, in this so-called cut, net spending usually goes up.
- The second definition is one I refer to as the fallacy of a reduced wish list. Government creates its own wish list to grow its budget $10M next year. When it only get $6M of the planned increase, they announce they’ve cut spending $4 million. Again, this so-called cut translates into more spending and expansion of government.
So what is a real cut? A real cut must meet one of the following three criteria:
- Next year’s total spending must be less than this year’s total spending. If it’s lower, it’s a cut; or
- Next year’s total funding plan must be fewer total dollars than this year’s total funding plan, if it is, it’s a cut; or
- If next year’s planned spending per person is less than this year’s planned spending per person, it might be a cut. The key word is “might,” because you have to pay close attention to the details. If the government reduces the amount of spending funded by each taxpayer, it may reasonably be considered a cut in spending-per-taxpayer. This could happen when the population of a jurisdiction is increasing, but expenses are fixed. On the other hand, if the government reduces benefits for each recipient of a social program by 1%, but addicts 50% more people to the same social service, it’s not a cut. It is an expansion of government.
So there you have it; three definitions of real cuts in spending. Everything else is fiction.
Understanding the games played by government officials will help citizens decode “government budget speak” and determine whether so-called cuts are fiction or fact.
STAY TUNED NEXT WEEK FOR PART 2 of GOVERNMENT SPENDING CUTS when we discuss the threat to our freedoms from cuts that aren’t.
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