Saturday, May 2, 2020

The budget cuts necessary to avoid a tax increase will not be easy cuts.

by Rod Williams - Sometimes when people are complaining about the size of the federal budget or the deficit or the national debt, they will say things like, "We ought to stop giving all this money to foreign counties."  Maybe we do give away too much, maybe sometimes the countries we give to do not appreciate it and fail to support us when we need their support.  However, often it does pay off.  Often our aid does create friendships and allies in the world.  In any event foreign aid only comes to 1% of the federal budget.  Including military assistance, foreign aid only accounts for 1.4% of the federal budget. We cannot balance the budget by cutting foreign aid.

Social Security, Medicaid, Medicare, unemployment insurance, and Obamacare account for 70% of all federal spending. Almost no one advocates cuts to these programs.  Military spending makes up 16% of the budget.  At a time when China is annexing the South China Sea and exerting influence in much of the undeveloped world and Russian is threatening Europe, I do not see how any rational person thinks it is wise to cut our military.

Interest on the national debt is about 8%, of the budget and it simply can't be cut. We are fortunate that interest rates are low and our country has been able to borrow at low rates.   This is not to suggest that I do not think we should seriously address our national debt and that I do not want a balance budget. It is to suggest that it is not easy to do so.  You can't balance the budget by cutting foreign aid.

Locally, we are facing a serious budget shortfall and the mayor has proposed a 32% property tax increase.  Just as some people think we can balance the federal budget by cutting foreign aid, I have heard some people say things like, "We ought to stop spending all of this money on things like art projects like those big pool cues at the roundabout."  Or, they will say things like, "We ought to quit paying companies to move here."  That is as about as ridiculous as saying we can balance the federal budget by cutting foreign aid. The funding for Arts is an insignificant amount. That is not to say that if should not be cut but it won't balance the budget. Money foregone to lure companies to Nashville, in many cases, may have been a mistake but that is water under the bridge and going forward we are doing much less of that. That will not solve our current budget problems.

I oppose a tax increase and hope there is massive opposition to raising taxes. However, one should not kid themselves into thinking there is an easy way to solve the budget problem.  If the mayor and the council had the will there are some programs that are wasteful and could generate real savings, the most obvious being closing General Hospital. Even if we were not having a budget crisis, we should get out of the hospital business.  And, we should get out of the nursing home business.  Other cuts however would be much more difficult.  Unless you are ready to see less road maintenance and have your local branch library closed or the number of days it is open reduced, then I don't think you are seriously ready to avoid a tax increase.

For a better understanding of the budgetary challenges facing the city, where the money comes from and how the money is spent, this is a good resource: Citizens guide to Metro Budget

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