The Budgetary Process and the Simpsons

“In the absence of justice, what is sovereignty but organized robbery?” -St. Augustine

I’m not a huge Simpsons fan, and haven’t seen an episode in quite some time. However, the recent debates about debt-ceiling, spending programs, taxes, and all the rest reminds me of the following Simpsons sketch.

Governments have a way of doing that.They’ll pass one bill that mandates this or that spending program, and then another that mandates a balanced budget, and then a third which limits taxes. Soon enough we are in a place with, as mathematicians call it, “no feasible solution.” So what happens? Who knows. Things totter on and various groups insist that their legal constraint has greater weight, though all were passed at the same level of government. Of course, even if they weren’t that doesn’t always settle the issue.

Recently, the House passed a “Cut, Cap, and Balance” bill. Without digging through the particulars, which I really don’t care to do, the bill “Cuts” spending by some nominal amount (hundreds of billions of dollars – not much in the face of a $1.65 trillion deficit), places a “Cap” on federal spending which reduces slowly to 19.9% of GDP, and requires the passage of a Balanced budget amendment before raising the debt ceiling.

Spending cuts are are easy enough to understand, at least what they are intended to be whether they ever actually materialize. It’s the “Cap” part that I find most interesting. Entitlement spending is well on its way to consuming the entire federal budget. What happens when the law, requiring these massive entitlement payments, requires spending in excess of the GDP cap, required by law? For that matter, what happens with a future congress passes a budget (voting it into law) that spends more than 19.9% of GDP, as required by law? (We’ll forget for a moment that GDP contains a number of farcical calculations and assume it is actually relevant.)

Passing a cap into law makes for good politics, but it doesn’t actually accomplish anything. It’s good politics because it attempts to get Republicans off the hook for spending cuts. Currently, any time they even dare mention a cut to this or that program they are accused of hating the poor, the elderly, and puppies. (Democrats hear the same when they propose cuts in defense spending … “you don’t support our troops!”)

Now, the balanced budget amendment is another thing. I think it would be a great idea, and I think it would find approval of 3/4 of the states (as required by the Constitution). Sure, I’d like to think we could allow Congress to deficit spend if a crisis arose, but they deficit spend all the time without batting an eye – in good times and bad. They need to have the credit cards cut up and work from the debit card only.

Then again, balanced budget amendments to Constitutions don’t exactly work all the time. The Constitution, the law itself, is not written in stone. Lawmakers flout the law all the time. California has a balanced budget amendment, and is rapidly approaching insolvency under a mountain of debt and obligations. Good thing they have that amendment …

 

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