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Deficits: The Best Restraint on Government December 16, 2008

Posted by federalist in Government Spending, Unions.
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Is your government running a deficit?  Perhaps you should be grateful.  After all, representative government only knows two regimes: Deficit, and surplus.  And in only one of those regimes is the taxpayer’s interest a serious consideration.

When government has a surplus of revenue it cannot say no to more spending.  When money is sitting on the ledger:

  • Government employees know it.  Anyone who has worked with government knows that the first rule of budgeting is to spend all your money.  Bureaucrats don’t make a lot of friends by returning unneeded funds to the treasury.  Government employees are the first to see a surplus coming and so they are also the first to try to expand their obligations and cook their books to soak it up in advance. 
  • Unions know it.  It is practically impossible to turn down a raise to public employees during a surplus: No administrator will piss off a union unless taxpayers are threatening his livelihood.  And since the surplus has already been taken from the taxpayers, the cost to the administrator of giving it away is nothing.
  • Lobbyists know it.  They inundate politicians with lists of things to which they can’t possibly say no.  Again, taxpayers already handed over the money, so politicians can now placate special interests for free.

Only facing a deficit can politicians even begin to question government spending.  Only then do they have to choose between raising the burden on their constituents and the cost of buying peace with the pigs feeding at the public trough.

For taxpayers government surpluses are like rainbows: Only occasionally seen, and never able to be grasped.  Perhaps this is ultimately the fault of the taxpayers, who tolerate constant tax rates and only seem to notice their burden when it is increased.

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