Have You Balanced Your Books?

W ho knew government bean-counting could be so provocative?

Forget elected officials, the civil servants who have captured the public’s ire are the Green Eye Shade Gang who used to cipher in obscurity.

Not anymore. Like Joseph Heller’s Capt. Yossarian, budget crunchers live a Catch-22 existence. Spent more than you had? Bad. Produced a surplus for a rainy day? Bad. Cut spending and reduced services to account for tax-cutting initiatives? Very bad.

Cynical citizens parrot the popular notion that each government entity is infused with flubber. “Why don’t they just trim the fat?” they ask, as if the fat were just hanging off the ledger awaiting a Ginsu knife.

The problem, of course, is that one man’s fat is another man’s muscle. “The Fat” isn’t a separate entry that an accountant can just delete from the budget.

Nevertheless, the answer for some is really quite simple: Government should just balance the books like we do at home. Like we do at home?

Please. God. No.

This notion of Mom and Pop at the kitchen table hammering out a budget is beyond quaint. “Gosh, Hon, the price of Double Stuf Oreos is outstripping inflation. I’m afraid we’ll have to do without.”

Be honest: Have you worked up a household budget? Do you live by it? If so, what percentage of households would you guess does the same?

Most households spend more than they earn, which means Americans have a negative savings rate. We shop ‘til we drop. Then we get up and shop some more. We readily relinquish “hard-earned dollars” like no other people on Earth. We even fork it over just so we don’t have to get out of the car and walk into a bank.

Imagine school principals pulling up to ATMs to withdraw cash to pay for school supplies. We’d scream about the fees. “That’s OUR money!”

Yet at the same time, our houses get bigger, our cars get bigger, our bellies get bigger. It’s as if the whole country is trying to be Texas. (Oh, and look who’s leading the presidential polls). We’re livin’ large, because we continue to charge. Boy howdy, now why can’t the government do that?

Well, for one thing, we won’t let it. The government is forced to come up with a budget and live by it. If it managed money like us, the answers would be simple. Need to fill potholes? Charge it! Want to save public nurses and immunizations? Charge it! Want to lure more talented people into government work? Charge it! And if we hit our credit limit, sign up for another card, or take out a second mortgage. Can’t pay the bills? Declare bankruptcy, just like 1.4 million Americans did in 1998.

Financial planners advise families to keep a cash reserve that would cover expenses for three to six months. Does this sound like your household?

Yet, government has gotten quite good at doing exactly that. John Maggs, writing for the National Journal, notes that federal, state and local governments saved $377 billion in 1998 in the form of budget surpluses, which function as cash reserves should the economy turn south.

On the other hand, Maggs writes, personal savings by consumers ran at negative $36 billion in 1998 and is forecast to reach negative $172 billion this year.

I’m all for taxing and spending more efficiently. And I hope that government accountants continue to find ways to manage money more effectively.

But, please, don’t do it like us.