Reason Foundation

Reason Foundation

When "Balanced Budget" equals Bullshit

Adrian Moore
February 3, 2007, 2:59pm

I don't know why I let this stuff make me so mad. . . When Governor Schwarzenegger presented his budget plan, he was full of boasts. Including, "I'm very happy to announce today that in this new budget our new operating deficit has been reduced to zero. You heard me right. We have reduced the operating deficit to zero." Wow! Realy? That would be major progress after too many years of spending more than comes in. But no, of course not, it was a big fat lie. The first clue came form state Finance Director Mike Genest pointing out that the budget "spends $1,863,000,000 more than it takes in." Ring the clue bell. That means we have NOT reduced the operating deficit to zero. Word games ensue. More details here. But short story is Genest says the $1.8 billion shortfall is "a gross operating deficit" and the governorwas talking about the "net operating deficit." Huh? Well, that means the governor was not counting one time expenses like paying back debt. Huh? again! Well hell. I can balance my budget that way. I just won't count one time expeses like paying the taxes I owe on April 15th! Ring the clue bell again. A budget is an accounting of all revenue and spending. SImply "not counting" something doesn't make it balance. Well, maybe in the movies.

Adrian Moore is Vice President, Policy

Print This