Cutting budgets and grinding axes
People like to compare the state or federal budget to a family’s budget, and base suggestions about what government should do on the habits of regular people. For example, new House Speaker Bill O’Brien plans to switch the order of New Hampshire’s budget process, looking first at revenues and then at spending, because this is what families do.Is this what families do? Add up the amount of money they have and then figure out what to spend it on? In one sense, especially in our consumer economy, people do spend based on how much they have at their disposal. A lot of people do choose a bigger TV, more features on a cell phone, or a fancier house, just because they have the money to pay for it.Or, all too often, even when they don’t. Personal debt is the norm: mortgage debt, car debt, credit card debt. Our economy runs not just on meeting our needs, but on the stoking and instant gratification of our desires. The way we understand our needs actually promotes overspending and debt.But what does a family do when it doesn’t have enough? It re-examines every need, scales back as much as possible and keeps trying to bring in more money somehow.This is where the comparison between regular people and governments gets interesting. Individually, people can scale back a long way, depending on where they start, from eating out to eating in, from steak to hamburger, bologna to beans, three meals to two, to the food pantry, food stamps, the dumpster behind the supermarket.Beyond the comforts of a warm bed and a full belly, all that individuals lose when they don’t have enough is the chance to reach their fullest potential, to make their fullest contribution to the world. People can survive quite a lot before it kills them.But what about a state? Is there a point in the scaling back at which damage to our whole becomes greater than the sum of harm to our parts? We already accept a certain level of harm to our parts – for example, that certain children, veterans, neighbors are cold and hungry, that some people who get sick will suffer without care or die before their time, that it might take a state trooper an hour to respond to someone’s emergency, or a year or two for somebody’s court case to get resolved.Somewhere, however, there is a point beyond which the scaling back incurs irreparable harm, harm beyond the human toll we’ve already agreed to accept. Have we reached it? Have we passed it? Would we know it if we saw it?Is that point set at exactly the amount of revenue we generate in any given year, in good times or bad, whatever that amount may be?A panelist at a recent conference in Manchester, sponsored by the Concord Coalition and the Whittemore School at the University of New Hampshire, offered a simple test for determining the viability of government spending: Is it an investment whose benefits exceed its costs?A family without enough re-examines every need, scales back as much as possible and tries to bring in more money somehow. Individuals do act on impulse and governments can be reckless too. But not being able to make ends meet isn’t always the result of reckless spending. Cuts can be reckless too, when they become more about ax-grinding than pruning for new growth. And just as sometimes it may be irresponsible not to take a second job to provide for one’s family, so too can it be irresponsible for a state not to raise sufficient revenue to meet its basic obligations.Cathy Silber is executive director of the Granite State Fair Tax Coalition.