Thursday, February 07, 2008

Connecticut’s Budget

Governor Rell’s new budget demonstrates that it is possible for an old dog – no slur on the governor intended – to learn some new tricks.

Her last budget, heavy on spending, caused major eruptions in her party. This one is far more modest. In leftist lingo, it is “unimaginative.”

“In her annual budget message” said Lew Andrews of The Yankee Institute for Public Policy Studies, “she promised no income tax increases and that expenditures would finally be kept in line.”

The executive director of the free market institute was not all smiles. “The Governor,” he said, “is still enamored with the idea that government bureaucrats are best equipped to pick winners and losers in private industry. Her proposal to dedicate $5.5 million to attract nanotechnology companies would, if passed, just waste taxpayers’ money. It would be far better for employment in Connecticut, if the legislature were asked to consider a broad reduction of corporate taxes and fees.”

Sometimes the old tricks kick in spontaneously. Republican governors have in the past sought to mollify their more imaginative critics by using budget surpluses to inaugurate new, expensive and counterproductive programs.

In the good old days, Republicans with spine would not have allowed surpluses on the grounds that a surplus is, by definition, the amount of money that the government has over taxed its citizens.

Democrat free spenders are loath to return surpluses to the people they have overcharged for their services for much the same reason that state commissioners are reluctant to under spend their budgets. Overspending assures that budget allocations in succeeding years will continue to mount upwards on the principle: The more you spend, the more you get. Under spending – saving money – is a self destructive exercise, which is why no governor, Republican or Democrat, has lately proposed budgets that reduce spending.

If you are a Democrat politician in a state driven by the “spend more get more” principle, there is no future in responsible budgeting. If you are a Republican politician, proposing responsible budgets that reduce spending will certainly get you in the bad graces of those in the media who are not imaginative enough to but a price tag on what they consider the “needs” of the state. It was George Will, the conservative columnist, who defined a “need” as a “want that is more than twenty four hours old.”

The Republican governor this year has proposed “keeping spending in line,” a modest proposal indeed, and one that may help to starve the beast.

However, at the mere hint of resolution, the beast will bare its teeth and shows its claws.

Both nationally and in Connecticut, Democrats this year are supporting tax rebates to “stimulate” an economy that has drifted into the doldrums. The rational supporting the rebates may be stated as follows: A laggard economy cannot produce sufficient tax revenue to support government programs. Therefore, the economy must be stimulated through a rebate program that returns tax money to people who may then spend it to revive the economy.” This rational is a grudging admission on the part of people who are largely responsible for the laggard economy that – take a big breath now – tax cuts increase government revenues by permitting people to spend money and “grow” the economy.

That principle was operative in the economy long before American conservativism was a blip on the radar screen of liberal bureaucrats and their enablers in national and state legislatures who, always and everywhere, "need" more.

Tax cuts are good because: a) they return economic decision making from the maze of self interested bureaucracies to the people, who are better able to address their own most pressing needs, b) they stimulate the economy and provide more revenue for necessary and efficient government programs and c) the liberties of a people are inversely related to the growth of government; the more free the government is to direct peoples lives, the less free will people be to shape their own futures.

That should be the message of every Republican running for office in the state of Connecticut.

Sadly, it won’t be
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