• 287 days Will The ECB Continue To Hike Rates?
  • 287 days Forbes: Aramco Remains Largest Company In The Middle East
  • 289 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 689 days Could Crypto Overtake Traditional Investment?
  • 693 days Americans Still Quitting Jobs At Record Pace
  • 695 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 699 days Is The Dollar Too Strong?
  • 699 days Big Tech Disappoints Investors on Earnings Calls
  • 700 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 701 days China Is Quietly Trying To Distance Itself From Russia
  • 702 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 706 days Crypto Investors Won Big In 2021
  • 706 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 707 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 709 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 709 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 713 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 714 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 714 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 716 days Are NFTs About To Take Over Gaming?
What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

Tesla Struggles To Compete In European Market

Tesla Struggles To Compete In European Market

Tesla continues to catch the…

Another Retail Giant Bites The Dust

Another Retail Giant Bites The Dust

Forever 21 filed for Chapter…

Robert Folsom

Robert Folsom

Elliott Wave International

Robert Folsom is a financial writer and editor for Elliott Wave International. He has covered politics, popular culture, economics and the financial markets for two…

Contact Author

  1. Home
  2. Markets
  3. Other

This is Fiscal "Restraint"?

It's been less than a month since the proposed fiscal year 2006 Federal budget was in the news. If you can barely recall the story -- or don't remember it at all -- that tells you have fast the news coverage came and went, which must have been a relief for the politicians. Their worst fear should be that taxpayers would look long enough to find the countless examples of the absurd and outrageous in the small print.

Yes, I realize that this budget had "the first outright cut in this wide swath of government programs proposed by any president since Ronald Reagan," and I also know that critics called it "mean, not lean."

But these debates are misleading at best. The political process is not about making government smaller, only about how much larger it will be. The budget has increased in every one of the past 30 years. Look it up. The Federal government will collect more taxes in the new fiscal year than in the previous one (again); it will spend more than it collects (again); and, its total spending will exceed total spending in the previous year (did I say "again"?).

During the brief news cycle when the budget was in the headlines, I came across an AP wire story about the Department of Transportation budget: the article said the department was getting a spending increase for a new headquarters building, to the tune of $100 million. One hundred million bucks for a new building. I tried to find the line item where the enterprising reporter uncovered saw this, but I was unable to. It was nowhere in the 12-page OMB summary of the Department of Transportation's budget.

Nor was it in the 27-page summary tables of the entire budget, but there sure was a lot of other stuff. For example, you may think that $29.3 billion should equip the Department of Homeland Security to carry out its mission. Apparently not, because tens or hundreds of millions of additional Homeland Security dollars were also doled out to every other cabinet-level agency and then some -- including the Smithsonian Institution ($75 million), the National Science Foundation ($342 million), and the Department of Health and Human Services ($4.2 billion). There was also my favorite line item in any respectable funding table, the ever-present "Other," in this case "Other Agencies," which received $813 million.

And it was right around this time (Feb. 4) that Fed Chairman Greenspan gave a speech about the current account (or trade) deficit, and said:

"The voice of fiscal restraint, barely audible a year ago, has at least partially regained volume. If actions are taken to reduce federal government dissaving, pressures to borrow from abroad will presumably diminish."

"Fiscal restraint"? I myself haven't heard that voice at any volume -- not now, not a year ago. The federal government sure isn't going to slow down its spending; all that stuff about budget cuts is rubbish. "Cuts" is code language for a slower rate of growth. The budget gets bigger every year. Look it up.

You can probably imagine what I think of all this, so I needn't spell it out. Budget "debates" come and go in the news more often than you may imagine, but rarely for very long. Next time it does, remember some of the figures above. And think about the small print.

Back to homepage

Leave a comment

Leave a comment