Budget deal? It’s just more spending

In these weekly commentaries I try to stay pretty even-keeled but the whole “fiscal cliff” mess has driven me over the edge. The nation – the American people – are $16 trillion in debt – $16 trillion with no hope for reductions on the horizon. And, just so we’re clear, what Congress and President Obama just agreed to only makes matters worse.

But before I hit the roof, let’s keep budgets and debt in perspective. When we anger over such things it’s easy to forget that balanced budgets and zero debt really never have been the standard. Since 1791, when we first started keeping track of national debt, officially, the United States was in debt to foreign powers to the tune of $1.8 billion (in current dollars). In other words, the U.S. always has run a debt to one degree or another. Of course, periods of war (and there have been many since our founding) increase the debt most dramatically. But I should note that the decision in the 1960s to create the modern welfare state has taken this country to new levels of debt.

Budget surpluses are also rare at the federal level. From 1940 to 2013, a 73-year period, our federal government ran a budget surplus only 12 times. Out of six dozen years, Congress ran a budget surplus only a dozen times.

And I should add that while I support a constitutional amendment requiring balanced budgets, we need to be clear that politicians who want to spend your money will always find a way around any limitation to do so – always. Read more

Spending pledges vs. spending limits

Grover Norquist in 2011. (Photo: Gage Skidmore)

As Congress begins to drive America off the fiscal cliff, the politics of taxes and spending will reach new levels of absurdity. Over 20 years ago a young upstart in Washington, D.C., Grover Norquist, began an anti-tax campaign calling on every senator and congressman to sign a pledge that they would never vote to raise taxes. Nearly every Republican and many Democratic legislators have signed this pledge but with the fiscal cliff imminent, many members of Congress are starting to second-guess their decision.

Here’s what this sort of politics sounds like. Republican Senator Saxby Chambliss from Georgia says, “I care more about my country than I do about a 20-year-old pledge.” To which Grover Norquist responds, “Senator Chambliss promised the people of Georgia he would go to Washington and reform government rather than raise taxes to pay for bigger government. If he plans to vote for higher taxes to pay for Obama-sized government he should address the people of Georgia and let them know he plans to break his promise to them.”

Folks, the politics of the fiscal cliff is going to get ugly. But there are some simple realities about taxes and spending. First, there’s nothing inherently wrong with raising taxes – just as there’s nothing inherently wrong with lowering taxes. A free society needs government. The questions we face about government regard its size and scope. What are essential needs and what programs are nonessential? Read more

Interim Day: Grim impact of fed spending cuts on schoolchildren

At the Education Interim Committee on Capitol Hill this week, the committee heard a presentation about the potential impact of the pending federal sequestration policy on Utah’s public school and higher education systems.

The sequestration policy would be enacted early next year if Congress and the president do not reach an agreement to avoid it, and the policy would mean across-the-board federal spending cuts, including cuts to federal education spending, with the intent of lowering record federal deficits.

One legislator in the interim committee meeting noted that even if sequestration is avoided, it will not necessarily mean that federal education spending is held harmless, as any such agreement to avoid sequestration is likely to come only by changing across-the-board spending cuts to more targeted spending cuts, which are also likely to hit public schools in Utah.

It was a rather grim presentation for children in Utah’s public schools, to say the least. Read more

State tax revenue update shows a “marginally” improving economy and outlook

The latest tax revenue estimates reported to the Legislature’s Revenue and Taxation Interim Committee today showed that general and education fund revenues (mostly sales & use tax and personal/corporate income taxes, respectively) for fiscal year 2011 came in $80 million higher than originally projected. Additionally, transportation fund revenues (mostly gas taxes and automobile-related fees) are estimated to be $10 million lower than originally projected. These are still preliminary estimates, so the final numbers may yet change, but they indicate an economic environment that is improving, although slowly.

One legislator summarized what these figures mean for Utah’s economy by saying that property values and unemployment in the state are improving “marginally.” There was agreement with the sentiment that Utah’s economy is improving, but only slowly.

Limited government = more jobs, higher incomes, better services


Would you support an amendment to the Utah Constitution that means thousands more jobs for Utahns, lets Utah families keep more of their income, and ensures that important state government services are prepared for natural disasters or emergencies?

An amendment to enact reasonable limits on growth in state government spending, based on growth in population and inflation, would deliver exactly that. Read more

Today’s government-bungled finances echo economist’s warning of 65 years ago


Standard & Poor’s recent decision to downgrade the credit rating of the United States government from AAA to AA+ contributed to the biggest drop of the Dow Jones Industrial Average since December 2008. Gross national debt is at $14.5 trillion. Unemployment is 9.1 percent. And the government-owned Freddie Mac mortgage finance entity is asking for another $1.5 billion from taxpayers. According to Reuters, “Freddie Mac has drawn $65.2 billion from the government [read: taxpayers] since it was taken over at the height of the financial crisis in September of 2008.”

Clearly, federal bureaucrats from decades past until the present have failed as stewards of the taxes they take from the world’s greatest source of wealth: the private citizens of the United States. Though the questions and recriminations are innumerable as to the causes and possible solutions, this post addresses just one: Why shouldn’t government get involved in lending money? The federal government’s role as lender and banker has contributed substantially to the current fiasco. Is this a role government should play? Read more

Budget deal: Utah still addicted to the federal trough


A year and a half ago I wrote an article for the Standard-Examiner about how Utah is addicted to federal dollars. Since then, nothing has changed. The federal budget deal has again brought this issue to our attention.

A Deseret News article yesterday highlighted how Utah Transit Authority officials, “advocates for Utah’s poor and disabled,” leaders of the Utah Public Employees Association, Hill Air Force Base officials, and State Superintendent Larry Shumway are concerned that the newly signed budget deal could decrease federal funds available for the programs they support. In a related article, Mayor Ralph Becker expressed concerns that the budget stalemate could jeopardize $26 million promised for Salt Lake City’s two-mile streetcar extension. Read more

Education spending and the danger of narrow policy thinking


On Friday we wrote about not trying to “keep up with the Joneses” in regard to public education spending. Today I’ll make a few more observations about recently released spending data.

A story from the Salt Lake Tribune recently highlighted a research report from the Utah Foundation showing howUtah’s K-12 public education funding effort has declined since the 1990s.

In the report, “education funding effort” is defined by one piece of data: public education revenues per $1,000 of personal income. In other words, “education funding effort” is based on how much government takes from Utahns’ income via taxes in order to give money to public schools – and the more “education funding effort” the better. Read more

Don’t mind the Joneses; do what’s best for Utah


Trying to keep up with the Joneses can be damaging to one’s home environment – and to a state. Oft-expressed concerns about Utah’s public education funding highlight what I mean.

According to a new Utah Foundation report, Utah continues to spend less per pupil on public education than any other state and has fallen from 8th to 26th in education spending as a portion of personal income since 1992. For some reason, how Utah compares with other states is typically the focus of most conversations about Utah’s public education spending efforts (for example, see here).

While state-to-state comparative analyses may be informative and useful in some ways, to argue that Utah should spend more on public education, or on anything else, simply because other states, or all states, or the whole world, spend more than we do is illogical. Read more

‘Free’ lunch for all Utah children this summer – at your expense


This summer, many government schools (and parks and rec centers) in Utah are offering free meals to anyone under age 18 who shows up, regardless of their need, using federal tax dollars. Check out this video report to learn about the program:


More and more, government is using schools as welfare centers rather than education centers. Schools offer children and their families meals, medical care, day care, transportation, counseling and more.

What’s next?

Here’s the script of the video:

VOICE-OVER: The Utah State Office of Education supports a Summer Lunch Program that offers free meals to anyone under the age of 18. The catch? Well, there isn’t one. Charlene Allert, the assistant director for the child nutrition programs in the state of Utah, explains this program.

CHARLENE ALLERT: “The summer program is a program for kids; it’s to offer them healthy meals during times when school is not in session. And it’s only offered in neighborhoods where at least 50 percent of the kids qualify for free or reduced-price meals. In that community all kids can attend that program.”

VOICE-OVER: The summer food service program is federally funded and administered at the state level. This year there are 30 sponsors throughout the state and 224 sites that provide breakfast, lunch, snacks, and dinner, depending on the type of service offered at each site. Even though the program is only offered in low-income areas, children under 18 from anywhere can get a free lunch, no questions asked. In fact, school districts like Davis County advertise and invite anyone under 18 to attend, regardless of income.

ALLERT: “Parents decide whether or not they want to send their children to the sites; that’s an individual decision that they make. The school is area qualified; in other words, all children that come qualify for any meals at that site and we don’t make a differentiation between ‘that kid doesn’t look like they should qualify for this program’ and ‘that one does.’ All children that come to the sites qualify.”

VOICE-OVER: But do parents even know this program is intended for individuals who cannot afford food for their children? The majority of partakers at Washington Elementary in Bountiful said they heard about this FREE lunch from their friends and neighbors. When asked why she came to the lunch, one mom said:

MOM AT SCHOOL LUNCH PROGRAM: “Well, for one, it’s free; that’s great the kids can eat free, and I have four kids and so it’s nice just to come and not to have to worry about making them lunch every day and the cleanup afterwards.”

VOICE-OVER: This summer lunch program impacts the self-reliance of families and individuals. Bill Duncan, director of Sutherland Institute’s Center for Family and Society, explains how residents of Utah can become more and more dependent upon government.

BILL DUNCAN: “The creation of dependence in people who take these kinds of programs – it’s much easier to say, ‘Well, I’d like a free lunch,’ or something like that, rather than figure out ways of how you’re going to support your family. Even for people who might potentially be on the borderline there’s a risk that those people are going to say, ‘Well, we need the government to give us what we have,’ rather than figuring out ways to build their own self-reliance.”

BILL DUNCAN: “These kinds of programs are kind of inherently flawed because the challenge is you’re not going to have the parents come to the door and say, ‘Can you show us an income statement?’ – that would be pretty intrusive. But on the other hand, the government is sort of holding out this carrot: ‘Please come in and depend on us for your meals.’ That kind of judgment call is sometimes hard for people to make.”

VOICE-OVER: This “free lunch” attitude was even promoted as a way to “save money” in a post written by a local resident on a coupon clipping website.

BILL DUNCAN: “One problem we have already seen that you’ll see online is people talking about ‘hey, look this is a great way to save money, be a little more frugal.’ Frugality is great, but not necessarily with the expense of your neighbors who are taxpayers.”

VOICE-OVER: As the saying goes, there really is no “free lunch.” The growing acceptance of government handouts in our Utah communities is alarming. Should Utah participate in a taxpayer-funded lunch program, even if it is making Utahns more dependent on government? Do Utahns realize their “free lunch” is at their neighbors’ expense? Our freedom is reduced when government, by force of tax, takes from some of its citizens and gives to others. For Sutherland Institute, I’m Alexis Young, reminding you that policy, good or bad, changes lives!