Balanced Budget Baloney

balancedYou balance your budget and live within your means. Washington should do the same.–Rep. Tom Reed (R-NY)

Is Tom right to link a balanced budget to “living within your means? Certainly not. An individual might take on debt to buy a car–an unbalanced budget–while still able to pay the bills including the loan payments, thus living within one’s means.

My budget is what it is; the Federal Budget is millions times bigger. That makes it unlikely that what is good for me is good for the Federal Government. Here are some more differences between me and the Federal Government.

  • The Federal Government is immortal, I’m not.
  • The Federal Government levies taxes, I can’t.

I don’t have much in common with the Federal Government.

Who is “you?” Is it me, anyone, everyone, or what?

I may or may not balance my budget–I may take out a loan to buy a car. I may budget the payments, but the Federal Govt. will be criticized for having an unbalanced budget if they borrow money for any purpose, however worthwhile–another difference. Should the Federal Government balance its budget because I do–that’s ridiculous.

Is the “you” Tom refers to only those individuals who have a balanced budget? That’s silly too–should the Federal Govt. balance its budget because some people do?

Or is “you” everyone? That’s nonsense as well–even if everyone has a balanced budget every year which is certainly false, that’s no reason that the Federal Government should.

In the language of symbolic logic:

  • If p = “You balance your budget and live within your means.”
  • and q= “Washington should do the same,”

then Tom asserts “if p then q” or “p  -> q.” In that case it is also true that “if not q then not p” or “~q  -> ~p” (modus tollens) which is if Washington fails to balance its budget, then you should too. More often than not Washington doesn’t balance its budget, so as Tom asserts I/we/you need not either–what nonsense. If I unbalance my budget, I will do so because I want to not because Washington does.

Tom’s flippant claim–You balance your budget and live within your means. Washington should do the same–may be effective political speech, but logically it is nonsense. However Tom has plenty of bad company–the idea that the Federal Government should have a balanced budget in good times and bad is in the proposed 2016 GOP budget, is professed by most if not all the GOP presidential wannabes, and will doubtless be in the GOP platform next year.

© William Hungerford – May 2015

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About whungerford

* Contributor at NewNY23rd.com where we discuss the politics, economics, and events of the New New York 23rd Congressional District (Allegany, Cattaraugus, Chautauqua, Chemung, (Eastern) Ontario, Schuyler, Seneca, Steuben,Tioga, Tompkins, and Yates Counties) Please visit and comment on whatever strikes your fancy.
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12 Responses to Balanced Budget Baloney

  1. Anne says:

    Tom is becoming at the same time increasingly predictable and increasingly unhinged. We all know he’s (famously) “not an economist,” but Dr. Krugman is, and had this to say about balanced budgets earlier this year: http://www.nytimes.com/2015/01/23/opinion/paul-krugman-much-too-responsible.html

  2. josephurban says:

    One way to balance the budget AND help America at the same time is to cut spending…spending on Tom’s salary, office, health care, staff, transportation budget, etc. . He needs to lead by example. Show us dummies how easy it is to do. Think he will write a bill for that?

  3. pystew says:

    Families constantly run on debt.They have mortgages, car loans, and they use credit cards. Remember Rep. Reed still has a college loan and is notorious for paying his taxes late.

  4. Deb Meeker says:

    Let’s give the theory of a family’s vs. government’s ‘balanced budget’ a consideration. Within that budget there are costs for:
    shelter (defense),
    utilities (infrastructure),
    food ( education, jobs).
    health (medical requirements)

    If a family believes that they need to live in a mansion, there’s little left for all other necessities.
    Wouldn’t (as Tom Reed suggests) a “balanced budget”, suggest equity of proportionate spending, not a lopsided determination to appear to “keep up with the Joneses” ? What good is there in a family residing in glorified housing as they starve?
    Republican’s (and Tom Reed’s) ideas of a balanced budget are out of whack with sensible budgeting. They would balance the US government’s budget by eliminating all but the mansion.

  5. whungerford says:

    We may be taking Tom too literally. By “balanced budget” he probably means reduced spending for social programs he dislikes and even lower taxes for wealthy individuals and giant corporations.

  6. Anne says:

    I’m still wondering about that whole college loan thing. That should have long since been paid off, and my hunch is he’s cooking the books somewhere, or straight out lying about it.

  7. Deb Meeker says:

    Right – the mansion.

  8. whungerford says:

    A low interest loan is valuable, so I suppose that is why Tom has been in no hurry to pay it off.

  9. BOB McGILLl says:

    hey willy, do you take out loans to make your loan payments ? didn’t think so. THAT IS WHAT TOM MEANS, the government never pays off any debt, it just keeps barrowing to pay the interest. We still owe for WW1 and are just paying the interest 🙂

  10. whungerford says:

    Bob, thanks for your comment. As the article explains, I don’t have much in common with the Federal Government–what I might do or not do probably isn’t applicable to sovereign government. The idea that the National Debt must or should be repaid is wrong: it is neither necessary nor desirable particularly when the economy is struggling to recover from recession.

    Government may continue to borrow to meet its obligations which were approved by Congress. If borrowing is undesirable, Congress could cut spending or raise taxes. Of course if we borrow, it should be for a worthwhile purpose. If providing defensive missiles to Poland is unwise, perhaps we shouldn’t borrow to do that.

    It is hard to know what Tom means; I think he favors reduced spending for social programs he dislikes and even lower taxes for wealthy individuals and giant corporations. If he does mean government shouldn’t borrow, his votes ought to reflect that, which they do not.

  11. josephurban says:

    The issue is really simple when it comes to budgets. You have two ways of looking at it.
    1. What does my family, government, etc. NEED in order to fulfill our obligations? My family needed shelter, food, a safe environment, transportation,etc. I budgeted my money to best fulfill those needs. And if I had extra we might have a vacation,etc. My budget was determined by my income. When my income was very low we supplemented with WIC. And did without any extras. So, family budgets are largely determined by income level. Something you really can’t just change very easily. So, in this case, needs may not be fulfilled due to lack of the income. Or, you may have to borrow, if you can.
    2. Approach Two. What can I buy with my income level? Which needs can I fill and which will not be filled. This approach puts income first and budgets income to meet costs or needs.. And if there is not enough money, well, then there may be no dinner tonight. In this case you simply go hungry, or without health care, or without transportation.
    On the surface these look like the same idea, but they are not. If a government decides to put NEEDS first, then that government will find ways to raise the revenue to meet those needs.
    If a government puts revenue first, then a government will find ways to eliminate spending on NEEDS.
    A responsive government takes care of NEEDS. Now, we can argue from now until the Cubs win the World Series about which parts of the federal budget are “NEEDS”. But that is where the honest dispute should lie.
    Rather than set an arbitrary number and say this is how much tax dollars we are going to bring in, both parties should hammer out the list of NEEDs (be it military or food stamps or whatever) and then ADJUST taxes to meet those needs. To decide on an arbitrary taxation and them decide on what is necessary may be politically popular, but it is irresponsible,
    Two questions for Congress we need to always demand an answer to.
    1. What do you need the money for?
    2. How much revenue is needed to meet our obligations?

  12. whungerford says:

    Following approach 2 seasoned with voodoo economics, Kansas schools are closing early because the State failed to provide needed funds. Some might see education as a priority if not a necessity, but evidently not in Kansas.

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