By now, I’m sure most of you are tired of hearing about how the federal government is going to come to a standstill over a small cut in the rate of growth of the federal budget. If you believe the current administration, thousands will be laid off or fired, prisoners will be released, meat won’t get inspected and a hundred other ills will befall the American public.
These scare tactics should be beneath the dignity of elected officials, but unfortunately they are not. Rather than solve our spending problem in Washington, politicians are more interested in placing blame on the other party. The truth is, a very simple change in the way our federal government works would fix the problem of overspending.
My liberal friends would say, “You can’t run the government like a business.” While I agree that government is different from private business in its aims, goals and purpose, the mechanics are the same for both. Both have a work force and both have a management hierarchy charged with accomplishing some goal.
The government uses baseline budgeting, where next year’s budget is based on increasing last year’s budget. This method gives the employees the incentive to spend every dime they are allocated in the budget process so as not to lose funding the following year. In private business, many use zero-based budgeting, where each year the budget starts at zero and each expenditure for the coming year is evaluated based on its contribution to the accomplishment of the company goals.
If you want to slow the growth of government spending, switch the budgeting method and give government employees a cash incentive for reducing expenses. It works.