President Obama has asked his cabinet to cut 100 million dollars of government spending by finding ways to make government more efficient. His hope is that by finding 100 million dollars worth of waste, he will help to restore taxpayer faith in their government’s attempts to keep the economy healthy.
The subject of government spending is a hot topic here at Wallet Blog. We are in agreement with the President’s basic philosophy that the government needs to spend money to get us out of this recession—it’s about the only thing that helped the United States get out of the Great Depression. The system needs money and that money has to come from somewhere. If regular citizens are unable to stimulate the economy, then the government must intervene. To this end, we support, generally, President Obama’s decisions to inject cash into the system so as to support fiscal growth and to create job opportunities in a period of rampant unemployment.
Having said that, we must acknowledge that when the government puts its money into they system it can go one of two ways: it can either pay to support programs that will create new jobs and new economic opportunities, or it can pay to support programs that are inefficient and wasteful. So, obviously, it is a good thing to overhaul the system so as to get rid of government waste because each dollar not wasted, goes towards something worthwhile. However, 100 million dollars is really not much in the grand scheme of things. The federal budget from last year was 2.94 trillion dollars. Does President Obama really think that there is only 0.0034% of wasteful spending going on? Even the most efficient private corporation has more than 0.0034% of wasteful spending. The $100 million is not just a drop in the bucket—it is like a drop in the ocean.
What President Obama and his cabinet need to do is to temporarily put on hold their other plans and evaluate every single line item. Every single dollar wasted equates to an opportunity wasted. If overhauling the budget is a concern, and we think it should be, then real time and real consideration need to be given to the problem. While a 100 million dollars sounds like a lot of money, it is really such an infinitesimally small number compared to the budget that its removal will simply have no discernible impact. If the system requires overhauling, then by all means overhaul it, but do so with the seriousness the task deserves and not just as a lip service paid to tax payer confidence.