Debt reduction–when cutting spending isn’t really cutting spending
December 6, 2010
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Upon further review of the Debt Commission report that got shot down last week, I found something interesting that most of us don’t even realize.
Budgets in Washington tend to factor in an automatic annual increase in spending. In other words, every year the amount spent on a given program goes up regardless of necessity–and trust me, we all know that an organization will find a way to spend the money in order to avoid a budget cut. Anyway, when the debt commission spoke of spending “cuts,” there was outrage from both sides (depending on the program to get the cut). But it turns out there were smoke and mirrors involved. The commission did not recommend actual cuts. What they did recommend was a reduction of the annual budget increases. In other words, they said “instead of programs x, y, and z getting automatic annual increases of 3%, lets just allow them to increase 2%.”
Translation: they couldn’t find actual spending cuts to be made! No reductions in spending. No freezes in spending. Just a slowdown in growth. Just wow.
I wish I could operate my home budget the way these folks run Washington!