Spend Money to Save Money?

28 States, the District of Columbia, and the Federal Government are all facing enormous deficits, the likes of which have ne'er been seen before. Many of the states are attempting to do something, yet the federal government is not. Many Democratic congressmen won their seats on the promise of stopping the overspending in Washington DC, this grandiose deficit run up by George Bush (never mind the fact that Congress controls the budget).

For those of you who are scared of numbers or are hardly economists, here is a quick economics lesson for you: a deficit occurs when a body spends more money than it has. Simple enough. In reality, you have two options: raise revenue or cut spending. In the minds of many elected officials, apparently a third option is to reverse the two, and raise spending while cutting revenue.

But wait, what's that you say? You say that's insane? You say that can't work? Tell that to the democrats, who think that they can hand out 1.4 trillion dollars (700 billion last FY and the possibility of another 700 to come on Jan. 20), and still maintain their promise of middle class tax cuts.

Never mind the fact that the state governments will have no way to overcome their own deficits, if new federal programs require state monetary input. There is an old formula from way, way back in the early 1990s created by Father Bush and used to success by the Republican Congress under President Clinton, called PAYGO. It is simple, if you want to increase spending in an area of the budget, you have to offset it by raising revenue or cutting another area of spending by an equal amount.

PAYGO leads to something very scary: a balanced budget. So I guess I can't help but ask a question. In his campaign, President-Elect Obama promised a return to the PAYGO principle. But now he's promising another $700 billion dollar bailout. He promised a middle class tax cut. Where is the rest of the spending cut? Where is the revenue increase? Where is the balance?

Apparently he believes that spending money will lead to saving money. But that has never been, nor will it ever be true. There is something missing in our economic crises, and I'm not talking about everybody's money. I'm talking about accountability. Where is the government help when Doc Baker's Pharmacy on Main Street has to close his doors? Maybe if he opened up on Wall Street, he would have had a better shot.