cost of government

Land Of The Free? Really?

It's ironic that while the rest of the world is moving toward economic freedom to ignite their economies, United States, under the governance of Washington's liberal elites, has retreated from liberty. It's true. While countries such as Denmark, Ireland, Canada, Switzerland, New Zealand and Australia were high-tailing forward, we moved backward, and Bahrain — Bahrain — is nipping at our heels. These are the conclusions of the The Wall Street Journal/Heritage Foundation annual Index of Economic Freedom. In fact, the report states that the U.S. score, which dropped to ninth in the study, fell from the ranks of the "economically free nations" to that of the "mostly free" ranks. According to the study, the U.S. decline was . . .

largely the result of large government spending increases and passage of President Barack Obama’s health care plan, which severely restricts consumer choice and private health care markets while increasing the size and cost of government.

Also of note is that more than half of the 183 countries in the survey improved their economic freedom, seeking to untangle their governments from the private sector to emerge from recession rather than increasing government's role (see Theodore Bromund at Heritage's The Foundry). The report rated countries' fiscal soundness and openness to trade and investment, government size, business and labor regulation, property rights, corruption, monetary stability and financial competition.

According to Virginia Fourth District Congressman Randy Forbes, who blogs about the study here:

It is clear that huge increases in government spending have impacted our economic freedom as a nation and it shows us that reining in government spending must be a top priority for the 112th Congress. Our nation was built on the premise that we are the “land of the free,” and that includes economic freedom. “Mostly free” should not be an economic option for the United States.

We now are in a period where big government not only threatens our liberty with ever increasing control over our decisions, but with the incomprehensible debt it has accrued in doing so. Debt enslaves people and societies to those to whom it owes the money. That those debts will never be called in is no longer realistic. We may always be be the home of the brave, but land of the free is not a guarantee.

Ekaineomics: The Poor, The Starving . . . The Government

Jesus said the poor will always be with us. That's not good news for those who think the size of government is huge and would like to see much of it go away, because state government now considers itself among the poor. So says Governor Tim Kaine. According to his excellency, higher gas prices are causing people to buy less gas which means . . . (drum roll, please) . . . less gas tax revenue! But wait: Don't liberals want us to use less gas so we won't pollute and melt the polar ice caps? What are they going to do when we move to hydrogen powered cars? There will be no gas left to tax! Poor liberals.

Aside from that inconsistency, we hope Governor Kaine learns from this some basic economics: The more expensive a good or service, the less of it is purchased. So adding taxes to the plethora of items outlined in his recent tax scheme will make those items more expensive. How does he see this as good for Virginia?

Now, more ekaineomics: He recently told The Richmond Times-Dispatch that the meat of state government was down to the bone:

"Obviously, we've been through two rounds of expense tightening," the governor said. "One in November, where I reduced the state budget by $300 million cutting expenses. And then in February I had to do a $1.4 billion reduction in the prospective two-year budget," he added.

"Obviously"? Who would have known, what with a budget of $78 billion, more than twice what it was 10 years ago, with new programs launched just this year, such as an expansion of a Pre-K program for which there was no demand. He gets around to admitting his "cuts" were really scale-backs of proposed increases, not actual reductions in programs, although he couched them as cuts.

Without doubt, higher gas prices have increased the cost of government, especially for necessary services such as state police and school bus transportation, as well as for operating state buildings — offices, prisons and colleges, for example.

"But we also have a revenue effect," said Kaine. "As gas prices go up, people drive fewer miles, and that reduces revenues to the state's transportation fund."

Kaine said he saw a recent statistic that showed Americans drove 11 billion fewer miles in the month of March than they did during March of last year. "So what we will see is increasing costs everywhere in state government and fewer transportation dollars," he added.

But it's not only the state. Localities are claiming the poor house blues, too. Several counties have refused to lower their real estate taxes, meaning higher revenues as the old rates are applied to properties with ever increasing assessments. In Richmond, Councilman Marty Jewell, Mayor Doug Wilder's one reliable ally, was the dissenter in an 8-1 vote to reduce the property tax by 3 cents to $1.20 of assessed value, from the current $1.23. (It should have rolled back to $1.18 to remain revenue neutral.) Despite campaign promises, the mayor was opposed to any tax reductions. According to the Times-Dispatch, Jewell, echoing the mayor, said it was too large a cut given the struggling economy because the city needs the money.

So the city and state need the money? What about the hard-working Virginians supplying the money?

But in the face of all this government poorness, some agencies are living large. As Robin Beres of the T-D discovered, two of Virginia's largest universities spent nearly $3 million in catering services just in the first three quarters of the 2008 fiscal year. (Read the article here, but note a typo: she means billions, not millions, in her state budget totals). In Fiscal Year 2007, various institutes of higher learning in the Commonwealth spent $250,000 alone at Richmond's grand hotel, The Jefferson. One college spent $30,000 at the Country Club of Virginia.

But that's just the fun stuff she found. It's well documented that the budget has grown from $15.5 billion in 1998 to $39 billion in the second year of Governor Kaine's two-year budget. But why? One reason she cites is payroll. U.S. Census statistics show Virginia as the 12 largest state with 7.7 million residents. North Carolina, the 10th largest state, has more than 9 million. However, Virginia has 122,000 full-time government employees to North Carolina's 93,000. Yet, we hear from the administration that Virginia government is strapped and we have to raise taxes. Wonder why.

Plainly put: If transportation, or any function government deems necessary, is in crisis, those in charge need to prioritize. Crisis situations get put to the top. Crises are solved with what you have at that moment because crises don't wait; by definition, if it could, it's not a crisis. So if Governor Kaine, Senate Majority Leader Dick Saslaw (D-35, Springfield) and the other liberals are sincere about solving the transportation crisis, they would stop trying to score political points, prioritize spending and cut just a little more than 1 percent of the $78 billion in the current two year budget and put that toward transportation (i.e., re-appropriate the last $1 billion in the budget).

It is disingenuous to say a budget that large cannot be cut. Not everything the government spends on is a priority, to say the least. Let there be no mistake: Funds are not lacking in Virginia. Perhaps truthfulness and leadership are.