Running Out Of Other People's Money, New York And Federal Versions
/I’m old enough to remember a time when government officeholders thought that a significant part of their job was prioritizing various options for public spending, in recognition that overspending on lower priorities would mean that nothing would be left for higher priorities. Somewhere along the line, that old-fashioned idea has fallen away. The new fad is an unending tidal wave of proposals for new government programs and spending initiatives which will, any day now, bring perfect justice and fairness to the world. Which ones will we implement? All of them!
But what about Margaret Thatcher’s famous observation that “eventually you run out of other people’s money.” Dramatic examples of that principle at work can be observed, for example, in Venezuela; but then, Venezuela seems to be just too far away for most Americans to pay attention. So how about looking closer to home, like in New York?
The budgeting process in New York City under the reign of uber-progressive Mayor Bill de Blasio and a like-minded City Council has been one where any idea that sounds like it might be “doing good” promptly gets funded. And thus the budget for a city of 8.5 million people has gone from $75 billion in de Blasio’s first budget five years ago, to $93 billion in the current fiscal year. (That’s well over $10,000 per capita, if you want to compare it to your city’s budget.) The New York Times from June 15 provides some instances of things added in this year’s version:
[A]n additional 200 social workers to work in city schools. . . . The cost is set at $26 million. . . . $40 million for a program to increase participation in next year’s federal census. The Sanitation Department will get more than $8.6 million for additional services, including extra litter baskets and trash pickup throughout the five boroughs. . . . [A]n additional $10 million to provide meals for needy seniors, $1 million to remove tree stumps and $640,000 to provide translation services at polling places.
But where is the real money going? I’ll give you a few examples of my favorite wildly skewed spending priorities:
As readers here know, nothing has more potential to make people do crazy things than the specter of “climate change.” Along the East River in Manhattan south of 14th Street, there is a park called East River Park, running for about 1.5 miles. De Blasio is about to begin construction on a redo of this park which will cover it in vast amounts of landfill, raising its elevation by approximately 8 - 10 feet, in order supposedly to protect the local residents from the coming rising seas of the climate apocalypse. The cost: $1.45 billion. The project will keep one or the other half of this perfectly-nice park closed through 2025. Meanwhile, the rest of lower Manhattan is also just barely above sea level, with no plans to do anything about it. And New York City as a whole has some 500+ miles of coastline. Does that mean an impending expense of $500 billion?
Prior Mayor Michael Bloomberg thought that he was doing everything possible about the issue of “homelessness,” and took city spending on the issue all the way up to about $1.6 billion per year. Six years into Mayor de Blasio, the spending level is now double that, about $3.2 billion annually. According to the Wall Street Journal on May 19, shelter operations alone have about doubled from under $1 billion to $1.9 billion a year. The number of “homeless” people? It continues to increase inexorably.
Per student spending on K-12 education in New York City has reached some $25,199 annually, according to the New York Post (from Census data) on May 19 here. That is some 13% higher than second-highest spender Boston (at $22,292), and well more than double the national average of $12,201. Principal driver of the differential: New York City pays its teachers and other employees more than double per student as the average of other jurisdictions. (Our results on standardized tests are actually worse than the national average, if you can believe that.)
But, with the economy booming, what do we care? Don’t we have plenty of money for whatever spending initiative sounds good at the moment? Actually, we are reaching limits all over the place. At my local newspaper the West View News this month, they have a run-down on the situation of the New York City Housing Authority, and particularly on its projects in the Greenwich Village/Chelsea neighborhoods. (Unfortunately these particular articles do not appear to be available online.) From a piece by Brian Pape:
New York City Housing Authority (NYCHA) is the city’s biggest landlord, and if any of the city’s other landlords had the track record of broken heating and plumbing, mold, lead poisoning, cockroach infestations, and rodent attacks on sleeping infants, they would deserve to be jailed. But this city no longer has the tax fund-ability to build and maintain housing for those who can pay no rent or very, very little.
WVN gives a figure for the “capital need” for just two local housing projects of some $500 million. The City is saying that it doesn’t have the money, and Ben Carson’s HUD has offered exactly nothing toward this claimed “need.” (Good for them.). So NYCHA has hit the wall. They’re now talking about forms of partial privatization.
Meanwhile, at the New York State level, the State Assembly, long solidly in Democratic Party hands, has repeatedly over the past 20 and more years passed a “single payer” healthcare plan known as the New York Health Act, only to have it fail in the Republican-controlled State Senate. Preliminary cost estimates of the NYHA have indicated that it would require roughly doubling the gross tax burden on New York’s citizens. This year the State Senate came into Democratic hands. What has happened to the NYHA? From The Nation, May 2:
[R]ecent reports indicate that the New York State Senate has no plans to vote on [the NYHA] legislation this session, preferring to hold more hearings on a bill that has been proposed in the legislature since 1992.
In other words, eventually you run out of other people’s money.
Over in the Democratic Party race for the presidential nomination, the key qualification for running is an unshakable belief that it is impossible to run out of other people’s money. All the candidates exhibit this phenomenon, but none more so than Elizabeth Warren, she of the 50+ “plans,” covering everything from Medicare for All to the Green New Deal to Free College to Student Loan Forgiveness and some 46 or so more. Is any one of these more important than the others? If resources are finite, which one will take priority? Nobody seems even to ask such a question. Meanwhile, with Medicare and Social Security and the baby-boomers retiring, they’re probably already out of other people’s money.