Wednesday, August 24, 2011

Across The Board Spending Cuts Reduce Spending Across The Board

Matthew Yglesias wrote Across The Board Spending Cuts Reduce Spending Across The Board, Even On Newsworthy Programs.

After this tweet, "Currently waiting from a blog post by @mattyglesias or @ezraklein accusing the GOP of trying to gut funding for earthquake monitoring."

"I really don’t understand how people can be so blinkered as to think that it’s somehow unfair to point out that a political movement that supports across the board cuts in federal spending does, in fact, want to cut spending on each and every program. That includes programs that are currently newsworthy. "

In business, I always thought across the board cuts were lazy. If you need to cut something small like 5%, maybe they're fine. But if you need to cut something substantial, or if this is the third 5% cut you've done, then you're being lazy. It's demoralizing and difficult (and often impossible) to "do more with less". Instead, companies should re-examine their strategies to account for the lower budget. They should commit to eliminating something and concentrate on other things that are working or have promise. Significant revenue shortfalls mean your strategy isn't working, fix it.

I think the same thing applies to governments. Find what you're willing to stop doing and cut it. And if you can't, find ways to raise revenues. In Yglesias' example maybe earthquake monitoring does have some slack it can eliminate, but maybe the CDC is already dangerously underfunded.

Here's a possible example that I hadn't heard of but unlikely allies Paul Krugman and Robert J. Samuelson both like, Don’t kill America’s databook.

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