Grappling With The Budget

Feb 15, 2011

I was looking at President Obama’s proposed next year’s budget yesterday, trying to get some clues for how all this would affect Michigan. Suddenly, I was hit by a revelation.

Nobody really understands this budget, I thought. Nobody understands this budget because nobody really can understand it. It is too big, too vast, has too many contours and moving parts.

Oh, I’m not just trying to cover up my own ignorance. I have been looking at government budgets for a long time. I can make what sounds like intelligent conversation about the federal budget, and  write stories analyzing and explaining it.

Indeed, I used to do that for newspapers in the 1980s. But how can anyone really understand a document that documents the proposed spending of three point seven trillion dollars?  A trillion, by the way, is a thousand billion, or a thousand thousand million dollars. Which is more than the mind can grasp.

Forty years ago, when I was taking freshman economics, America’s entire gross national product was less than a trillion dollars. Inflation has more than quintupled any figures, but government spending has more than kept pace.

When you look at the size of these numbers and the size of the deficit, it is easy to scream that we need to make massive cuts in federal spending. But when you study how deeply federal spending is interwoven into our lives, it is hard to see how to do that.

Yes, you can nibble at the margins. President Obama would cut two-thirds of the funding for Community Development Block Grants, which will mean some troubled neighborhoods in Flint and Detroit may not get the assistance they were counting on.

There will be less money for cleaning up the Great Lakes, but more than $13 million dollars to build a new barrier to try and keep out the Asian carp. Michigan will lose some jobs because the President is giving up on making something called the Expeditionary Fighting Vehicle for the Marine Corps.

The Marines don’t really want it, and it doesn’t seem to work very well. The President, as others before him, is attempting to use the budget as a tool of economic engineering.  He’s given up on hydrogen technology as a fuel of the future, something General Motors has also done.

Hydrogen funding is being eliminated, something legendary Michigan inventor Stan Ovshinsky says is a mistake. Instead, the President’s budget is dramatically increasing funding for electric vehicles, including infrastructure like charging stations.

There will be cuts to Pell grants for poor students and an attempt to get the richest Americans and corporations to pay more.

Naturally, all the President’s proposals will  be modified by Congress, after much kicking and screaming. This will also be affected by other things that happen over the year.

But what a detailed look at this budget gives you is a sense of how deeply federal spending is part of everything in Michigan.

And everywhere else. Keynesians used to say that we didn’t need to worry much about federal deficit spending, because we really just owed it to ourselves. Now, however, we owe much of it to future generations, and an ever-increasing amount to the Chinese.

You have to wonder what will happen when payment, at long last, comes due.