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The Real Surplus


Gov. George W. Bush has a presidential campaign slogan that says: “The surplus isn’t the government’s money. It’s the people’s money.”

What about the other nearly $2 trillion the government takes from productive American citizens? Judging from the governor’s campaign, that must be the government’s money because the people aren’t going to keep any of it if he becomes president.

The anticipated surplus-which might never actually materialize, built as it is on unrealistic spending assumptions-has been helpful in revealing how various politicians see the role of government in our lives. Remember, President Clinton said we can’t have the money because we may not spend it right. (“Right” equals his way.) Vice President Gore, as to be expected, agrees with the president. Government has first dibs: the National Taxpayers Union says his proposed new spending would more than exhaust the projected surpluses. He might let you keep some of your money-but only if you do as he says.

Admittedly, Mr. Bush’s position is the most interesting. The surplus, he says, is our money. That’s not quite as clear a position as it sounds. How do we compute the surplus? If the government spends $1.8 trillion in fiscal 2000, is everything the government takes in over that amount in each of the next ten years the surplus? Not quite. The politicians regard a certain amount of growth in government spending as the natural order of things. Spending on “entitlements” goes up automatically without Congress’s having to do anything. This is a neat trick. The budget rises on its own. Only some spending is called “discretionary.” Of course, since Congress has the power to change the entitlement laws, it’s really all discretionary. That’s just one of those little ways that government shrouds itself from us, its theoretical masters.

I’m suggesting that the dividing line between the surplus and the rest of the revenue side of the budget is arbitrary. It’s all our money. Look at it this way: A few years ago, there was no AmericaCorps, Mr. Clinton’s boondoggle program that pays young people to do “volunteer” work and whose budget the Republican Congress has increased a mere 248 percent (to $282 million) in the last five years. But that money, since it is earmarked for an existing program (however new), is not the people’s money, according to Mr. Bush. The only money he thinks is ours is some of the money the politicians haven’t thought of a way to spend yet. To which, Mr. Gore responds: I’ll think of a way to spend it.

The fact is, Mr. Bush, the “conservative” in the race, proposes to cut nothing from existing spending. He favors eliminating no department, agency, or program. In effect, he is saying that the government is just the right size and he cannot stand reducing it by even a single dollar. He may say the surplus is an overpayment for government services, but he’s apparently sure that within the individual department and agency budgets there’s been no overpayment at all. Government is as efficient as can be.

Actually, Mr. Bush doesn’t believe all of the surplus is our money. He wants to increase spending, just not as much as Mr. Gore. The GOP candidate promises a prescription-drug program for retired people, the only virtue of which is that it might not be as expensive as the Gore plan (but don’t bet the farm on it). And he has a host of new domestic and military spending iniatives in mind.

Let it be noted, too, that his plan to let us keep some-about one-quarter-of the total projected ten-year surplus (including Social Security) is on the modest side. Although Mr. Bush calls for an across-the-board cut in income-tax rates, he wouldn’t eliminate the top rate his father created when he broke his “no new taxes” promise in 1990. That would have been a nice touch. Nor have I heard of any plan to roll back the seven Social Security payroll-tax increases enacted during the 12 Reagan-Bush years.

I’ve got a better definition of the surplus: any money over what the government needs to perform the powers enumerated in the Constitution. Looked at that way, we’re due a mighty big tax cut.

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    Sheldon Richman is former vice president and editor at The Future of Freedom Foundation and editor of FFF's monthly journal, Future of Freedom. For 15 years he was editor of The Freeman, published by the Foundation for Economic Education in Irvington, New York. He is the author of FFF's award-winning book Separating School & State: How to Liberate America's Families; Your Money or Your Life: Why We Must Abolish the Income Tax; and Tethered Citizens: Time to Repeal the Welfare State. Calling for the abolition, not the reform, of public schooling. Separating School & State has become a landmark book in both libertarian and educational circles. In his column in the Financial Times, Michael Prowse wrote: "I recommend a subversive tract, Separating School & State by Sheldon Richman of the Cato Institute, a Washington think tank... . I also think that Mr. Richman is right to fear that state education undermines personal responsibility..." Sheldon's articles on economic policy, education, civil liberties, American history, foreign policy, and the Middle East have appeared in the Washington Post, Wall Street Journal, American Scholar, Chicago Tribune, USA Today, Washington Times, The American Conservative, Insight, Cato Policy Report, Journal of Economic Development, The Freeman, The World & I, Reason, Washington Report on Middle East Affairs, Middle East Policy, Liberty magazine, and other publications. He is a contributor to the The Concise Encyclopedia of Economics. A former newspaper reporter and senior editor at the Cato Institute and the Institute for Humane Studies, Sheldon is a graduate of Temple University in Philadelphia. He blogs at Free Association. Send him e-mail.