Topic: Economics
McCain's 'Freeze' A look at McCain's proposed budget freeze.by jposty
(libertarian)
Thursday, April 17, 2008
Sen. John McCain laid out an economic policy that included a one-year halt on spending, specifically "discretionary spending," until an investigation of the budget is complete.
Military and veterans programs will not be effected nor will entitlements such as Social Security. Programs such as, education, food inspection and homeland security programs will remain static. Some argue that the freeze is actually a budget cut once the Fed's inflationary policies are taken into account.
The Wall Street Journal quoted McCain's top economic adviser, Douglas Holtz-Eakin, as saying $490 Bn of the annual budget is allotted to such programs and that the freeze will directly cut $15 Bn off the budget's increase in the next fiscal year.
Sen. McCain's initial step to address the catastrophic federal budget is a sound one, although, it doesn't quite go far enough. Until government bureaucracies adopt a zero based budgetary system it will be almost impossible to reign in government largess.
In the current budgetary process, a government bureaucracy must only justify an increase in spending to gain more funds for the upcoming fiscal year. Usually inflation adjustment or the implementation of a new program will warrant such an increase, however, the funding to existing programs are not even addressed.
Although, zero based budgeting is more time consuming, it will almost assuredly reduce the waste in government. It will assure that every stapler, employee, computer, consultant, etc be justified for further funding every budgetary cycle. Not only will an increase in funding be harder to obtain but to simply maintain their current budget they must justify its need for the following term.
This policy simply opens up governmental agencies to more oversight by congress, not just on the total sum of their budget but exactly what these agencies can use their funds for. It would also eliminate the standard practice of spending every penny in their budget, as to justify their need for an increase. How much money is mismanaged or squandered every year to justify a raise that they apparently did not need to begin with?
The views expressed in this
article are those of jposty only and do not represent
the views of Nolan Chart, LLC or its affiliates. jposty is
solely responsible for the contents of this article and is not an
employee or otherwise affiliated with Nolan Chart, LLC in his/her role as a columnist.
If Congress and the White House would go back to the PAYGO, pay as you go, method of budgeting, we would get something closer to a balanced budget. But the piggies who are late to the trough squeal the loudest.
The spending freeze is a first step. I would also fold in any emergency spending for this year to be paid for in the next year's budget. Somehow this war in Iraq can be run for years as an off-budget expense.
The next step would be to eliminate entire agencies that have outlived their usefullness. Wait, that is the government!
"Some argue that the freeze is actually a budget cut once the Fed's inflationary policies are taken into account."
Lol, just lol. Does anyone find it so ironic that they argue that?
All in all, it's hardly like it was there at all. I mean, McCain DOES have some conservative tendencies, but the overall effectiveness will probably be limited as we see a greater expansion for social security and the 3 M's: Medicare, Medicaid, and the Military.
All the more proof that the parties have converged into two arbitrary factions: war versus entitlements. With McCain, you'll get both!
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