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Sunday, June 19, 2011

Is a national budget necessary?

I am not going to go too long on this thought. However, this morning on Fox News Sunday's "roundtable" discussion the panelist/spokesman for the Obama administration and democrat party at large said the following (transcript here:

BURTON: Right, but the country is still running. Like, we're doing OK without a budget in the sense that nothing is shutting down.

The Congress can still pass the jobs measures that the president wants to move forward. Congress can still move forward on a lot of the different things that will help to actually create jobs and grow the economy.

We have made progress on jobs, 2.1 million in this recovery. The economy is growing as opposed to contracting.

There's a lot more that need to get done. I don't know that the budget is necessarily the be all, end all as it relates to how we're actually going to get to economy on a track that's going to have sustained growth.

In essence, the spokesman says that the Congress and the government as a whole does not need a budget because the important thing is jobs. This might be true from a political sense. I am confident that voters will respond more positively to jobs than to a budget. However, a budget is important because it is legislative language that specifies to some extent what the government can and cannot do, especially the executive branch. To the extent that the House and Senate did not pass a budget during the Obama administration, they gave a free hand to spend without authority or accountability. In some way this might match with a Keynesian philosophy, I am not sure one way or the other, but when I heard the spokesman say, in essence, that the government doesn't need a budget because jobs are what's important, I had images of every failed statist economy flash through my head.

Politics vs. philosophy? At times it is tough to disentangle the two. Is not having a budget a purely political act - simultaneously allowing the Congress and the Executive branches to continue spending on pet projects that are essentially arbitrary, avoiding putting anything down on paper that could later be used against democrats come election time in 2010 when they had a clear chance to lose, and forcing the incoming Republicans to come up with a plan to do something with spending/deficit/debt (which turns out to be the Ryan plan) after which the Democrats can accuse Republicans of wanting to kill everyone's grandmother?

Or is not having a budget a philosophical act that consciously attempted to move our country even further away from accountability on the part of the elected officials?

Maybe both?

End of pet-peeve of the day.

Happy father's day.

Passing a budget is largely symbolic as long as we pretend that that the debt, spending and taxes are somehow three separate issues (http://www.kusi.com/story/14828306/battle-rages-over-raising-of-debt-ceiling). The fact is that until Republicans get serious enough about the budget to raise taxes and Democrats get serious enough about it to pull the plug on a few grandmas, fixing the debt is a fantasy.
Yet, I'm puzzled that this is conflated as an issue of "statism." Weren't the Soviet socialist statist dictators folks are scared we are becoming able to pass budgets? (And balanced ones to boot!) If it weren't for the fact that we have a robust democracy with competing views reasonably well representated in government, I don't think we would have the sort of gridlock that would result in no budget being passed. There's a rich political economy literature on this.
I would prefer to file this under "Democracy is the worst possible system, except all the others."
I think the process of creating a budget (even with the supposed non-discretionary part) is a valuable part of the overall debate that our republic needs to keep the politicians connected to the elected. Discussions about outrageous earmarks and other spending patterns are important - no budget = no discussion about crazy spending patterns => statist approach to such crazy spending patterns. I agree that there are few if any people that want to have a serious discussion about what to do with the debt but the markets won't care who is serious about what when they downgrade us.
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