It’s budget season, when we get to hear the age-old liberal talking point about how budgets are “moral documents.” Everyone seems to be getting into the act — left-wing news sites, Bernie Sanders, and all the other usual suspects.
But budgets aren’t moral documents. Baseline budgeting just sets levels of spending for the good or bad decisions you’ve already made in the past. It is facile to argue that choices of specific levels of spending have an obvious moral character in a world where resources are finite.
That’s true enough when we’re talking about real budget cuts, which make a surprise appearance in President Trump’s first budget. It goes double for the more usual cases where they conversation is merely one of government spending’s rate of growth. Are we supposed to believe that that a $9 billion increase to this or that department is good but a $4 billion increase is evil? As if that last $5 billion — a fraction of a percent of the federal budget — was the magic bullet that would have ended human suffering, something our ever-increasing spending levels have never accomplished in the past?
In 2011, this moral argument was invoked over the weighty question of whether the U.S. should spend $42.7 trillion over the next decade (the Republican version) or $43.9 trillion (the Democratic version). If you believe that this or anything like it is the weighty moral issue of our time, then you probably should stop thinking about morality before you hurt yourself.
Yes, Trump’s budget cuts are deeper than most of those we’ve seen proposed in the recent past. But this has to happen at some point. A growing share of federal revenues is being consumed by entitlement programs whose levels Congress doesn’t directly control on an annual basis. That means the regular discretionary side of the budget has to start making some room, either now or later.
If government could magically produce wealth from nothing, then, yes, we would have a moral obligation to produce enough of it for everyone to be comfortable. Why not? In that Santa Claus world, there are no trade-offs.
But once government has guaranteed us a reasonable level of security and the rule of law — the necessary conditions for human flourishing — it reaches a point where it starts producing less for each dollar it consumes. Suddenly, the opportunity cost of government action becomes an important issue.
And our federal government, which has its finger in everything — agricultural quotas, weather forecasting, export finance, bombing foreign countries, feeding college students, zoning policy, green (and other) corporate welfare, setting educational curricula, television and radio broadcasting, dictating the content of insurance policies, fighting taxpayers’ Freedom of Information requests in court — is well into the territory where trade-offs start to matter. A massive reduction in the scope of government will be needed, either now or later, if we expect (for example) to continue providing a basic safety net for the least fortunate.
Moreover, as long as government is dishing out more than it takes in (something our entitlement programs guarantee for the foreseeable future), we can’t just assume we have the luxury of doing all the well-intentioned or feel-good spending we’d like to do. The Environmental Protection Agency’s relatively recent entry into the carbon business provides an excellent example, and it’s no surprise that it’s the first thing on the chopping block. It isn’t cheap — either in terms of the higher spending or the lower tax revenues from slower growth — to fool yourself into thinking you’re actually doing something meaningful to reverse climate change.
Even large tax increases on the wealthy, which are politically out of the question right now anyway, would add relatively little to what government takes in as compared with the size of Uncle Sam’s spending problem. There has never been a strong correlation between either the top marginal or the average marginal income tax rates and government revenue at any point in the last 50 years.
So this isn’t really about whether it’s “moral” to squeeze Peter the same amount but pay Paul a bit less. It’s really about just how bad an austerity program we’re setting up for Peter and Paul’s grandchildren to implement and suffer through. Depending on what we do now. They might be forced to make far more terrible and consequential cuts in 40 years, all because of our failure to make reforms now that might seem tough but are modest in comparison.
If viewed that way, perhaps there’s some weak moral element to budgets after all.
