March 13th, 2013

Baseline Budgets, Increases, Cuts – More Nonsense!


Listen closely to recent political nattering relating to the “sequester,” and you realize that this is all semantics.  Is the automatic sequester an across the board “cut” in the actual dollars spent?  Or, is the automatic sequester a 2% reduction in what otherwise would have been a 7% increase in the dollars spent?

On December 4, 2012, the Wall Street Journal included an article in its Review and Outlook section entitled The Budget Baseline Con – How Washington fools the public about spending ‘cuts.’  The article is worth a careful read by every American citizen.

The Wall Street Journal article lays out the essential elements of the con game citizens are subjected to on a daily basis concerning the federal budget.  Here are a few key excerpts. 

Both the White House and House Republicans are pretending that their goal is “reducing the deficit,” which they suggest means making real spending choices.  They are talking about a “$4 trillion plan,” or something, regardless of how that number is reached.

Here’s the reality: Those numbers have no real meaning because they are conjured in the wilderness of mirrors that is the federal budget process. Since 1974, Capitol Hill’s “baseline” has automatically increased spending every year according to Congressional Budget Office projections, which means before anyone has submitted a budget or cast a single vote.  Tax and spending changes are then measured off that inflated baseline, not in absolute terms.  [emphasis added]

Here is a hypothetical to emphasize the point.  In the 2009 budget the Congress appropriates $100 for “widgets.”  In the 2011 budget, the Congressional Budget Office projects that $110 will be needed to purchase “widgets.”  To American citizens able to add and subtract, appropriating $110 in 2011 would be a $10 increase.


The increase – $10  more dollars – is NOT an increase at all.  It is $0 change, because the new budget is “just keeping pace.”  If in 2011 Congress decides to spend $105 on “widgets,”  this is NOT a $5 increase from $100, but a $5 cut from the projection of $110.  Make sense?  Is this how you want Congress to treat your tax contributions to federal revenues?

Back to the WSJ, and a few more excerpts:

In Washington, Democrats designed this system to make it easier to defend annual spending increases and to portray any reduction in the baseline as a spending “cut.” . . .

Republicans used to object to this game, but in recent years they seem to have given up. In an October 2010 speech at the American Enterprise Institute, House Speaker Boehner proposed that “we ought to start at square one” and rewrite the 1974 budget act. But he then dropped the idea . . .

In previous Blogs, we have described how Amendment 5 to The Second Bill of Rights throws sunshine across the federal government’s fiscal performance – revenues, expenses, obligations – just in time for each and every federal election.

Amendment 5 puts a final constitutional end to baseline budgeting.

Would the world end if the federal government was required to produce financial statements similar in content to that which it requires of publicly held corporations?  We think not!

If The Second Bill of Rights were adopted, this silly talk would end.  None of us would miss the current grandstanding that masquerades as serious political speech.

We hope you will dig deeper into these and other ideas in our new book.  To help us rekindle individual freedom and liberty in the United States, click on the Book link above or go directly to Amazon:

With malice toward none, and charity for all!


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