A Tale of Two Bad Budgets // Marc Seelinger Jr. // 11.28.2011

Fiscal problems seem to be all the rage these days. The federal government is broke, and the Democrats are relentlessly pursuing tax increases. At UNC-Chapel Hill, the university (like many other public universities) has an $80 million hole in its budget that the Board of Trustees has determined to fill by increasing tuition by 40 percent. Both problems share the same origin and the proposed solutions both share the same faulty premises.

Fundamentally, these two problems are not revenue problems but expenditure problems. While the economic situation has had some effect on tax and tuition receipts, a $15 trillion hole is not dug overnight. Simply put, both the university and the federal government spend too much money, and both entities have made the wasting of public money an art form. Congress wastes about $45,000 on such worthwhile endeavors as “Cowboy Poetry Festivals” and $181,000 to study cocaine’s effect on the sex drive of the Japanese quail, while UNC spends $20,000 to paint a crosswalk. There is a fundamental disconnect between the people who make the decisions to fund these sorts of projects and reality. They see the problem as a failure to take in enough money while the problem really lies in their gratuitous expenditures.

However, the real origins of these problems are much deeper than a simple spending binge. If this were simply a matter of spending too much, the fiscal problems would be more transitory. Rotations in leadership would check occasional indulgences and, once these indulgences were recognized as such, an effort would be made to correct them. Yet, in our current situation, these cyclical corrections do not seem to be in the offing. Both Republicans and Democrats spend with abandon, while only pretending to make any effort to reign in their excesses (cf. the failed Super Committee). This suggests that the core of these problems is cultural.

Between 1987 and 2007, the cost of attending a four-year university increased almost 439 percent. During the same period, federal spending increased 265 percent according to the St. Louis Fed.  Such massive increases in spending suggest that the lack of fiscal discipline currently on display is not a new phenomenon but is chronic. The fact that this lack of fiscal responsibility permeates both federal and state government (and even many local governments) further suggests that the problems we face are not the result of a few people playing fast and furious with government bank accounts. Instead, they are the result of a cultural shift that values immediate gratification and short-term gain and neglects the long-term consequences of today’s actions. In what other environment would government officials think it acceptable to propose these tax and tuition increases while failing to address the underlying problems that necessitate the increases?

I think the reason behind the persistence of this problem lies partly in the insularity of the governing class. When people such as Nancy Pelosi or Harry Reid have spent much of their adult lives serving in Congress, you cannot really expect them to have much empathy with the plight of the average citizen. However, even if the politicians are a little slow on the uptake, there has certainly been a shift in public sentiment—starting with the emergence of the Tea Party and continuing through the present. The public is much more aware of the fiscal irresponsibility of government. However, the question remains: will these changes in public sentiment be enough to change the political culture before fiscal Armageddon? It is only with a radical change in our approach to spending and budgeting that we will be able to salvage the affordability of higher education and the government’s solvency.

Marc Seelinger Jr. // University of North Carolina at Chapel Hill // @marcseelinger

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Comments

  1. Marc,

    I think you are fairly close to the bullseye. Another cultural influence here is a great need to accomplish something. Legislators have little they can do but legislate and campaign. To ensure they are re-elected, they try to enact change through laws without considering the long-term effects.

    So while we can blame the legislators for worrying about their jobs more than their constituents, we can also look inward at our own meterstick for success. Why isn’t it acceptable for a legislator to do nothing while he is in office? As a steward, these people should not be considered unsuccessful anymore than a police officer being fired because they did not arrest enough people.

    As a nation, though, I believe it is our culture of creating change as a method of adding value that has acted as a catalyst for excessive legislation. The truth is, adding value comes in many forms, sometimes by just being present. Just a thought.

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