Stoneage Ramblings

By John R. Stone

At the time of this writing it was not clear if the U.S. government would be shut down for lack of funds or not.

The issue is that Congress has not passed a budget for the government’s budget year which begins October 1.

In the past the government has, usually at the last minute, passed what are called continuing resolutions (CRs) that allow agencies to spend what they did the previous year until Congress gets around to passing legislation that changes that. Sometimes those resolutions are for a week to two, sometimes several months. Sometimes the CRs are just adopted as the budget for the coming year.

If you or I ran our homes that way we’d be broke. We look at our incomes and the things we would like to do and pare the “like to dos” back to fit the money coming in.

The federal government has the right to borrow. So it can do all the “likes” it wants and just borrow the money. That has led to our $33 trillion or so of national debt. We are very close to the point where servicing that debt is going to be one of the largest items in the federal budget, the interest alone is approaching $1 trillion a year.

Professor Louis Johnston of St. John’s and St. Ben’s was telling us in senior college at the Alexandria Technical and Community College recently what needs to happen is that we need to look further out than next week or even next year. Our leaders need to be looking 20 to 30 years down the road because the gap between income and expenditures is growing meaning debt is accumulating faster and faster.

Some other economists say that when the economy is good the government should be operating with a surplus of income over expenditures. Then when disasters strike, such as the COVID pandemic, there is room to borrow. But the government has been borrowing in good times because when people see surpluses they say the government is taking too much of our money and vote in tax cuts. Of course when the next crisis arrives we have to borrow again.

Income tax rates in the 1950s were as high as 90 percent. President Reagan was a hero for reducing the top rate in the 1980s of around 70 percent to below 40 percent for the highest income people.

The government probably could not go to a balanced budget in one year. The shock to the economy from the lost jobs would rob it of income and make the problem worse. A recovery could take many years.

Trying to go to a balanced budget in a short period would be easier with tax increases, almost impossible without. Whenever a crisis strikes people expect the government to kick in some funds. Whether it is drought relief for farmers, hurricane assistance, helping those who lost their homes in wildfires or tornadoes, people expect the federal government to kick in some relief.

Everybody has an idea of something the government could spend less on, most of those ideas are useful but individually represent a very small portion of the budget. One would have to get a bunch of those items approved to get any meaningful cuts.

But every program has a constituency. Eliminate drought aid, FEMA emergency aid, Federal highway money or a host of other things and those who like those programs will fight against cuts, making it hard to get cuts politically.

Our elected officials have failed to do their job dealing with the finances of this country. The cuts the holdouts in approving CRs want are really very small and mean very little in the overall picture. That’s what makes this shutdown so senseless.

We need a plan where we all work together to get the finances of this nation back on track. That will take program cuts or elimination and higher taxes.

What should happen is that on October 1 if a budget is not passed, members of Congress and their staffs should go without pay. Further, that pay would not be reimbursed later. They had a year to get the job done and failed.

I don’t see the no pay issue ever getting passed, maybe we’ll just need to remember this next election and vote people into office who will do their jobs.