Diary

Priorities

This cheerful message, created more than 100 years ago, was first published in the New York Sun newspaper in 1904 as:  ‘Twixt optimist and pessimist The difference is droll;  The optimist the doughnut sees – The pessimist the hole.

 In 1929, a restaurant in Charleston, West Virginia, revitalized The Optimist’s Creed’s wording and message. The Optimist’s Creed was displayed in the restaurant’s window and written in more contemporary language for the patrons. The targeted audience was customers who drank coffee and ate “sinkers,” another word for donuts.   “As you ramble through Life, Brother, Whatever be your goal.  Keep your eye upon the doughnut,  And not upon the hole.”

https://cdn.shopify.com/s/files/1/0131/3352/files/Optimists_Creed_1939.jpg?1770

 

 

(http://coolculinaria.com/blogs/news/7671973-the-optimists-creed-2013)

 

This is a simple way of saying get your priorities straight and keep your eye on what is important.   The plethora of competing and seemingly important issues swirling about and being voiced by politicians, editorial writers, radio and television commentators, bloggers, et al. do not lend themselves to easy prioritizing, but they should nevertheless be prioritized. The situation is not good. We owe about $18 Trillion because government can not prioritize and spent far more than it took in for many years. We have among us many illegal immigrants mainly because government can not prioritize and fails to control our borders. We spend too much on “entitlements” – especially means tested entitlements because government has not been able to prioritize elimination of the duplications within the government departments that deliver “entitlements” or actions to encourage economic growth so that there will be less demand for “entitlements.” Government has trouble doing anything except reacting to situations that arise and then the solution likely causes another problem or other unforeseen circumstance that requires another solution, etc.

We normally think the reason for this is that government has become too large and unwieldy. However, even though that is true, I think there is another reason for governmental dysfunction having to do with priorities – or the lack thereof. The national government should have the means of developing priorities so that no matter what happens, some things will be recognized as more important than others and will be pursued before others.

The recent midterm election provides a chance to rectify this deficiency. The Republicans will now control the legislative side of the Federal Government but not to the degree where they can pass legislation over a presidential veto unless there are enough Democrats in the Senate that will vote with the Republican majority. The other choice, of course would be cooperation between the President and the Congress in setting priorities and sticking with them.

Since the economy provides the wherewithal for everything else, I suggest that GDP growth become the number one priority rather than the also ran that it has been since 2009 or earlier.

Economic growth undergirds all of our national power. It provides the wealth necessary to field armies, maintain a navy and maintain and operate a diplomatic corps so we can deal with other countries. Since these functions are mentioned in the Constitution and are also the means of retaining our independence and protecting our people, I would think that they (collectively) would be priority number two.

If we (and our Congress and President) can agree on our number one and two priorities, then it follows that all other things are lower on the priority list than the first two. If we are trying to reduce expenditures so as not to add to our already humongous debt, then the savings must come out of areas with less priority than the first two. Balancing the budget and not adding to the national debt can be done (see http://archive.lewrockwell.com/orig12/scribner1.1.1.html and http://www.americanthinker.com/2012/11/once_again_lets_not_increase_the_debt_ceiling.html ).

This points out another problem with setting priorities. Our elected officials, President, Congressmen and Senators, are loath to cut anything. And when they do “cut,” the cut is to the increase in the budget item, not last year’s spending level, so the result is still more spending than the previous year. Most of them would prefer to take in more revenue in order not to cut. This might be an area where constituents should hold their representatives feet to the fire and demand prioritization and real departmental budget cuts to lesser priority budgets. However, there is also a way to increase revenue without increasing taxes. Increase economic growth. Since taxes come from transactions in the economy and the earnings of the actors in the economy, more economic activity will produce more tax revenue without changing the tax rate. More economic growth will also put more people to work and this will create still more growth plus reduce demand for means tested entitlements while providing more tax revenue.

Thinking this way might encourage the executive and legislative branches of government to look around and repeal laws and regulations that impede economic growth. If our elected representatives really would think this way, they would also refrain from passing laws or allowing departments of government to promulgate regulations that will work against economic growth. Ah, you say, there is currently a requirement that laws and regulations must have an economic impact statement. My answer is, look how well that works. For the past six years we have hardly been able to find our economic growth even if using a microscope! The EPA alone has promulgated regulations that probably cost us at least a point of GDP growth. What about the other departments of government? Who is making sure that regulations do not impede economic growth? Answer: No one!

Pursuing this further, we also have to cut out waste and duplication. In some cases there are four (or maybe more) places in government providing the same services. Since we can find this out, why does government have so much trouble cutting out this waste and duplication? Then we can look at federal vs. state services. The Federal Government should not be doing anything the states can do and should stop pushing the states to do the Federal bidding. Programs should be either federal or state but not both and federal payments to run state programs (like Medicaid) should be discontinued. Tightening up here will not only allow more efficient use of less tax money, it will also help GDP growth. Besides, it is just good government.

OK, who sets the priorities? The President and the Congress do – if there is a budget. However, for too many years there was no budget, there was just a continuing resolution that increased the spending authorization of many or all departments of government with out the discipline of a budget developed by the President and the Congress. I submit that every continuing resolution represents the failure of the President and the Congress to set priorities. Further it is the chief reason why we have $18 Trillion in debt, porous borders with illegal immigration and excessive government spending. It is also the reason why our economic growth is too low to provide work for all those who want to earn a living and provide for their own retirement.

This is a big failure of government by those we have elected and entrusted with the power to run things and spend our tax money. This failure goes back a lot of years, at least to the end of WWII and maybe further back. And while there were some responsible years, there have been a lot more irresponsible years and irresponsibility has become the “normal” operating posture of the Federal Government. Everything is a priority so nothing is a priority. There have been so many continuing resolutions that we now do not have a reliable history of which line is more or less important than any other line in the budget. This means unless we go all the way to base line budgeting (rather than starting with last year’s spending levels) and make every department justify every one its proposed expenses from the ground up, we will have difficulty with priorities and cutting spending. The people we have elected to run the government have created this mess and the people we are electing now will or will not clean it up. This malfeasance is costing us dearly and creating untold misery for a large number of our people. It will continue until we elect responsible people to office and let them know that we expect them to set priorities and stick to them. Did we just do that? Ir remains to be seen.

“As you ramble through Life, Brother, Whatever be your goal, Keep your eye upon the doughnut, And not upon the hole.”

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Jeff Scribner is a retired Army officer and president of ASI Enterprises, Inc., an investment bank serving small- and medium-sized businesses. He can be reached at [email protected]