Wednesday, January 26, 2011

A Note About Spending Cuts...

Spending cuts seem to be the global order of the day. It's very fashionable. It's very en vogue. You could even argue that it's very necessary. But all of the implementations I've seen seem to be very short-sighted, top-down approaches. The money will simply disappear from budgets and those in charge of the budgets are expected to make it work anyway. That's not a real long-term solution to budget cuts.

Take education for example. We spend a lot more in the state of Georgia on education than we did a decade ago. But where is that money now? Part of it is paying for updated facilities. Part of it is paying for our post-No Child Left Behind testing requirements. These aren't things you can just yank the rug out from under.

The answer to cutting the budget is to analyze what we are spending and come up with a plan to decrease that over time. We can't just cut our testing funding this year to pre-NCLB levels, but in a 5-year plan we can probably make reasonable progress.

The biggest failing of government budgeting is that budgets are set in reaction to current economic conditions rather than in anticipation of future economic conditions. Busts follow booms but the government continually gets blind-sided by the bust because they were too busy increasing their operating costs to what the economy could bear during the boom. We do need to cut spending, but the answer is to find a budget model that is sustainable during both economic extremes and that requires thinking past what will get our elected officials into office again. So sadly, it'll never happen.

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