The Great US Budget Baseline Scandal...

Duped again. The scales over the eyes of the American public are once again being lifted. Although no secret, the dynamics of baselline budgeting are in the limelight. As such, the dark secrets of the process are illuminated for all to see.

Our national and in some cases state practice of baseline budgeting is simple. We calculate expenses versus income including gains or losses over a given fiscal year and use that as a baseline. Then we legislate calculations that provide annual percentage increases in recurrent spending such as welfare, medicare, aid to education etc. These percentage increases are annually re-calculated for future years and are then fixed into the budget in advance of any given fiscal year.

Then we debate next year's actual budget without reference to percentage increases previously legislated. The result is a de facto increase in spending in spite of any newly agreed and legislated budget cuts. Take for example, education which may have a previously legislated percentage increase for next year of 6%, or (for purposes of illustration) 20 billion dollars. Next, we impose spending cuts for next year of say 10 billion and crow about our parsimony to anyone who cares to listen. But in fact, spending has increased owing to the baseline principle.

The only people in Washington that I believe to be serious about actually reducing spending and balancing the national budget and reducing the size of government are the Tea Party folks. Personality wise, they are not my favorite people. The enter the scene with a strong dose of holier than thou, hard core religion, extreme patriotism and an unshakable belief that by feeding the rich, the poor will benefit. Perhaps, but then again perhaps not.

Given the Tea Party's dedication to free market principles, the rich will become richer but not necessarily the poor, or middle class. This is because of the greed factors that have taken possession of American enterprise over the past several decades. Public welfare has been eclipsed by the obsessive accumulation of wealth. Sure, the rich give to charity, but in the form of enormous tax write-offs.

The case for the super poor is no better. According to our Treasury Secretary, Tim Geithner, 40% of the children born today will be eligible to receive food stamps. Poverty is feeding on itself in the USA and is understandably getting less healthy as a result.

Concepts are direly needed to dramatically relieve poverty and dramatically revive the economic strength of the middle class. To be sure, give away and welfare programs are not the solution. They only create dependencies which in turn expands the poverty base.

Nobody in power today wants to address these issues in a practical manner. All we get is a bunch of blah, blah, blah without any concrete evidence of serious concern on politicians parts, or workable solutions.

In the meantime, we are behaving like spoiled brats arguing amongst ourselves in full view of the world at large. We should be ashamed of ourselves. My take is that we will continue to wash our dirty laundry with even more exposure and revelations before, during and well after the issue of America's debt ceiling is decided. It would appear that America's capacity to tackle and resolve hard issues has turned sour. Pity that.