(if I were the) King of the Forest

At some point in listening to the endless debates over how much the government should spend and how that spending should be allocated – in other words, in the debate over the fundamental operations of government – it occurred to me that one of the problems we have in discussing such things is that very few people actually know what we spend already. ‘Conservatives’ decry “welfare spending” and want to beef up defense; ‘liberals’ demand “butter before guns”, convinced that we spend only a pittance on social needs and a fortune on the military. But when I looked at the actual numbers (for FY2004 at the CBO web-site) I was somewhat surprised at how the money is actually allocated, and I would bet that most people share my ignorance. I would further bet that if you asked ‘conservatives’ and ‘liberals’ to guess at the allocation of federal resources you would get vastly different estimates, with ‘conservatives’ grossly over-estimating and ‘liberals’ grossly under-estimating the relative weight assigned to “social programs” (and with them reversed on “defense”).

During the last presidential campaign John Kerry scored populist points castigating “greedy corporations” who avoided paying their “fare share” of taxes by “sheltering” their profits in foreign countries. In an era of corporate downsizing and record budget deficits that topic resonated with many people, and the charges were repeated widely before disappearing under the weight of other criticism more easily tied directly to George Bush. But before they disappeared The Boston Globe ran a piece by Stephen Glain on the topic in their business section. I sincerely believe there is a lot of questionable – or downright dishonest – stuff going on behind the corporate veil in support of avoiding taxes. But I also believe that a business reporter should consider the possibility that some practices characterized by populist politicians as malfeasance may actually have a rational and legitimate basis in business principles – and that a reporter writing a story on the topic should at least talk to some people in business who are using those practices before writing the story about them.

That kind of thinking, moreover, frames the debate on everything else. During the last presidential election, when it appeared we might actually have some temporary budget surplus lying around, we heard hundreds of proposals for how to spend the money – almost all of them by making permanent commitments to entitlement programs rather than one-time commitments to capital improvements. To someone who has to manage cash flow and capital needs for either a family or a business using a finite reserve fund as a down-payment on permanent spending commitments seems ludicrous; in an environment where there is no distinction between operations and infrastructure it seems routine.

They (and you) seem to imply that the several hundred billion dollars of deficit we now face is primarily the result of a less-than $35B cut in revenue due to the tax cuts — rather than the result of at least as much increased spending (about which you will never hear a bad word from the Democratic party). So isn’t that contention at least as cynical and misleading as that of the Republicans?

A down economy always catalyzes calls for increased government spending on all manner of “relief” programs. It has long been a mystery to me where people get the idea that money spent by government appears magically from the wellspring of good intentions – that resources used by government are not extracted from use elsewhere but are “free” and therefore painless. I suppose it comes from the fantasy that it is always possible to arrange for “someone else” to pay for those resources – that “I” (and everyone else) can assign the pain to “you” and take the benefit for myself. How to make that selfish arrangement seems to be a primary topic of debate in modern political discourse.

I started this book by announcing I knew how to reform the health-care system; it seems appropriate, then, that I end it with my health-care reform proposal.

I am writing to you as perhaps the last hope for sanity in the debate over health-care reform; despite my California address I am a native Granite Stater and my respect for both of you predates your current activities on behalf of the Concord Coalition. I, as most people, have become concerned about the direction in which the debate seems to be moving. Because of your commitment to weaning the American public, politicians, and government bureaucrats from the trap of entitlement programs I thought you might have a special interest in what becomes of this potentially gargantuan new entitlement program into which we seem to be plunging. It is my hope that your influence and straight talk may yet prevail over the politics dominating the discussion to date.