Tuesday, March 8, 2011

To The Bone, I Say!

The governor of Pennsylvania released his brutal budget today, and, as predicted, many services got cut and many interest groups are revving up for a fight. I'm not going into the details here, since it's not really relevant, except to point out that it's not fundamentally different than what we're seeing in Ohio and Wisconsin and even New York and New Jersey.

Really, I can't see how this hasn't been anticipated--governments have known for quite some time that resources have been strained, tax revenues have dried up, and that federal bailout stimulus money was going to come to an end. Candidates for office said they were going to slash spending, and then they got elected, and now they are doing the slashing. There really shouldn't be any surprises on anyone's end, except perhaps a brief moment of refreshing contemplation that a politician is actually 1) doing what they said they would do, and 2) doing it against popular opinion.

But wait--you say--how can it be against popular opinion if you just said they got elected on the same platform? It's easy--voters love it when they say you're going to slash spending, but when it actually comes time to rev up the chainsaw, they get outraged. It's happened in the past. Usually, someone backs off and reforms are tiny, piecemeal, and miss the point. I don't know if that's going to happen this time or not.

My opinion probably isn't worth much for public consumption--I'm quite the heartless jerk when it comes to this, in that I don't think it's inappropriate for the government to put the scare of life in people once in a while--but there are plenty of things I can already see. Many of these lessons were witnessed during the budget battles in the mid-90's, and it will be a test of greatness whether our leaders have learned from them.

For one, many departments, like the government is wont, are bloated and inefficient.* By starving them of funds, they will suddenly and presumably find ways to cut costs that probably should have happened years or decades ago. In the private sector, this happens when profits are lean or in the usual ritualistic cost-cutting campaigns managers are fond of performing in worryingly slim cycles. The public sector has no such mechanism, so it's up to the politicians to snatch the budget and get their manager-equivalents to figure out how to make ends meet. To me, this isn't necessarily a bad thing. While private and public sectors are different in how they should operate, the essential fundamentals of running a division/department/program are the same either way. Since there is no "natural" cost-cutting event in government, one has to be artificially forced by politicians. This is what we are witnessing now.

Of course, there is a good counter-attack by the affected government agencies, and, again, we saw this in the Gingrich-Clinton battles. When a department is forced to cut something, they don't push for efficiencies or find better suppliers or create new ways of performing your service. They cut something immensely popular first, like school lunches or Sesame Street or home heating rebates--and lift palms to the air in a shrug and state that what with the funds going away, something's got to give--and, oh look, Big Bird is eating food from Oscar's can because he got laid off. No matter that there were hundreds of things that could have been cut before it--strike at the flagship programs people actually want, and suddenly they'll be clamoring for heads on pikes.

Personally--and without knowing much about the situations in each state--the most amenable solution is probably some form of modest cut in budget with a real and specific structural change that will prevent the departments in question from busting their bottom line every year. Easier said than done, of course, but that's why I'm not a politician. 

The Pledge:  I say slash the budgets and let each department fight tooth and nail for every last dollar. But who hasn't been saying that since 1776? 

*I have a particular issue with education in this matter--I find many state-run (and private!) colleges and universities to be bloated, sloth-like monstrosities whose purpose of education has long ceased to be their primary objective. They have become mini-municipalities where lifestyle services are expected and social engineering readily available. But that will be a discussion for another day.

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