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March 04, 2008

Limits on cutting government waste

A popular political campaign plank is to cut wasteful government spending. Of course, the idea is appealing. Who wouldn't want to reduce waste in government or anywhere, for that matter. But are there programs in government budgets labeled waste? Listen

Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:

"Well, of course they're not, unless you are referring to waste disposal at a local government level. And that's really the problem, that it's very easy to talk about cutting government waste, but it's really hard to find it. For example lets look at the federal government budget; 82 percent of the budget is in programs like social security, Medicare/Medicaid, defense, interest on the national debt, and public assistance programs like food stamps and unemployment compensation. I would dare say that most people are in favor of those programs.

"So right off the bat you have 82 percent of the budget that's sort of off the table in terms of finding waste. Now there are some programs that are labeled earmarks. So some in the popular press call them pork spending. These are programs that bypass the regular budget process that favor a particular geographical area or sector. But the problem is that these programs collectively account for only one half of one percent of the federal budget. So instead of just broadly talking about cutting government waste, I think really what serious people have to do is just like if you want to cut back on your household budget you've got to go through and really closely examine where you're spending, weigh the costs and benefits of each of your spending categories. You have to do the same at the federal government level or state government level. You really have to go through each program, and very laboriously evaluate them and decide what can go and what has to stay."

Posted by Dave at March 4, 2008 08:11 AM