"More broadly, the fact that some government expenditure generates benefits in excess of costs (the economy needs some roads) does not mean additional expenditure generates value in excess of costs (the economy does not need to re-pave its roads every year). At some point additional expenditures hit diminishing returns and make no sense in cost-benefit terms.The problem with Mr. Miron's assessment is that he's proffering prudent financial advice to maniacal spending addicts in the federal govt.; IE: those who don't care for nothing, except their own power, prestige and profit, which is accomplished by spending other people's money - LOTS of it.
Transfer payments are also problematic from an efficiency perspective because they distort economic incentives. Unemployment insurance discourages work effort. Social Security subsidizes early retirement for people who are still able-bodied. Medicare and Medicaid create moral hazard, thereby generating excess health costs. Thus even if transfers help stimulate consumer spending, their net effect on the economy is unclear.
This implies that whether the sequester will harm or help the economy depends on whether cost-benefit considerations can justify the existing level of government expenditure. And on this question, the answer is clear. Across all categories, federal expenditure is far greater than necessary to achieve the legitimate goals of government intervention."
And you're required by law to give to them, or you'll go to jail.
Compounding it all is baseline budgeting, which assumes the previous year's federal budget is correct and needs no adjustment - except upwards to account for inflation.
So, if the previous year's budget included $9 billion in unaccounted preparedness funds for the Dept. of Homeland Security, those funds must be counted in next year's budget - with inflation adjusted dollars - or there will be wailing and gnashing of teeth about 'draconian cuts' to that department's budget.
This same insatiable desire to spend the tax payers' money applies across the board in a 'use it or lose it next fiscal year' insanity.
So, if the previous year's budget included a National Institutes of Health grant of $940,000 to university researchers to study fruit fly pheromones;
the GSA expenditure of $840,000 for a single department conference trip to Vegas; plus all govt. agencies' combined 894 lavish conferences in 2012, costing the tax payers $340 million;
the Dept. of Education spending $500 million to study why five-year-olds 'can’t sit still;'
the Dept. of Agriculture paying U.S. farmers $2 billion per year NOT to farm their land;
the State Dept.'s $2.6 million gift to China (china!) in order to train Chinese prostitutes to drink responsibly;
the OMB estimated waste, fraud and abuse for Medicare at $44 billion in 2012;
Obama's defiance of Congress by sending a state sponsor of terrorism $192,000,000 in foreign aid;
or Obama's $66 BILLION 'investment' in bankrupt green energy companies (Solyndra, A123, Ener1, Abound, etc.)
1,400 days without a budget because the democrat-controlled Senate has REFUSED to obey federal law and authorize a budget measure for the president to sign.
So amid all this federal fuster cluck foolishness, according to the chicken little doom and gloom sequester haters, the sun ain't gonna shine anymore, the sky's gonna fall, and we're all gonna die if $85 billion dollars in INCREASED federal spending is not achieved due to the eebil sequester.
And that, boys n girls, is why Washington D.C. is called a 'swamp.'
(graphic courtesy the Bastiat Institute)