Toward a Conservation Model of Government Spending

The concept of resource conservation has arisen out of the Marxist/socialist view of class exploitation. Take, for example, the exploitation of a lesser-developed nation’s minerals by a huge multinational corporation. A hundred years ago, if a big corporation moved into a small island nation and tore up its ecosystem to access and sell its copper ore, this was seen as progress. The copper would be used to build up the electric grids of nations, redistribute energy to build factories, make products to be sold for the growing consumer class to buy. But as the habitats of rare native wildlife were destroyed, as soil was contaminated, creeks were poisoned, and the lives of the local indigenous inhabitants disrupted for generations these big resource development projects were eventually seen more as acts of destruction than acts of progress.

Critics of progress, such as Rachel Carson and others in the 1950s, pointed out the narrowness of the concept of progress. In the long run these reckless acts against nature hindered progress, placed immediate exploitation by a few over the long term needs of the many. Often very few people, usually those elites who financed and administered the projects, were the only beneficiaries. 

This is how the Marxist concept of the exploitation of one class by another found its way into environmental activism. The remedy was for government to intercede and act to limit and/or prevent environmental damage.

Eventually entire departments of the Federal government came to be devoted to preserving the natural environment. Laws have been passed to ensure that the environmental impact of a new dam or a nuclear power plant, are explored, researched, written up, and submitted for the approval of the Federal government before any such potentially destructive project is completed. These proposals are called environmental impact statements.

But these rules primarily apply only to the exploitation of natural resources by the private sector. In the past, very few Federal government projects are subjected to this kind of scrutiny. 

Perhaps a new, pioneering view of conservation is needed. It would be interesting to view the government’s handling of financial resources as if the availability of credit and the seizure of wealth through taxation were exploitive. In other words, government should have to issue financial impact statements on such things as the establishment of public sector union pensions, the sale of municipal bonds, increases in property taxes, and the levying of new regulations and taxes upon consumers. 

We are told by politicians that new taxes are needed to improve school systems, to repair decaying roads and bridges, and support health care for the disadvantaged. But if a new school cannot be built if it required draining a wetland that supports migratory birds, how can it be built if it creates a damaging financial environment; if it stresses limited local financial resources? Particularly since local government salaries and pensions are driving cities into bankruptcy, disrupting their economies.

Consider student loan debt. Before public state universities could raise the cost of living in teacher pension systems, a financial impact statement should be written and approved by voters. Such an impact statement would include the current interest rate of student loans, the unemployment rate of recent college graduates, and the median cost of a mortgage and other expenses incurred after graduation. The complete financial environment of the student having to pay the student loan debt must be considered. This would be an interesting topic for research right now. It can use the software already developed for econometrics.

Right now the financial impact of student loan debt is ignored. Only the elites, those who benefit from these increases, have the power to control them. This is like asking a huge multinational mining corporation if it should give itself the permission to strip mine a rain forest in Indonesia in order to profit only its shareholders.

Congress has exempted itself from producing financial impact statements for the programs it forces taxpayers to pay for. While the Congressional Budget Office is tasked with making assessments as to the cost of projects, there is no evidence that these long term costs are seriously considered. It would be difficult to find an example of when Congress refused to spend money because the taxpayers would be adversely impacted. Those voters who are victimized and exploited, like the native inhabitants of Indonesia, have no say in the process. They are left to live with and pay for the exploitation of them by the political elites.  

There may be a strong correlation between local government spending and poverty. Detroit is a disaster of a city, yet its public sector unions are still getting their pension money. Just as a rainforest in Brazil will still make money for an oil drilling corporation even if the local environment is poisoned for centuries. 

Government has, up to now, largely escaped accountability for the financial devastation its policies have inflicted upon taxpayers. Government officials profit from their spending, yet don’t have to pay a penny to pay back the debt they create. This is a violation of their own conservation principle of “do no harm” to the environment they are changing.  

A related matter that also points toward the impact issue, is the way government money is misappropriated and misspent. For example, there is a Federal Title 18 law that money cannot be used for any other than its appropriated purpose. Yet in Illinois, when the state attorney general Lisa Madigan sued to get $300 million in money for those who were defrauded out of mortgage deals through banks, she kept $200 million for state pension plans. This is already illegal and should not be tolerated.

The EPA wants absolute power to determine when a construction project should be banned. Yet no one agency or representative of the people has absolute power to stop something like the Treasury’s purchase of mortgage based securities, or the bailout of big banks. These are still controlled by the insiders, the political elites, who make these decisions while ignoring the voters. The idea in the declaration of independence that government is of the people, by the people, and for the people, is ignored. 

What is needed is a dialogue. What is needed is for the nation to evolve to where the government cannot seize and abuse the financial resources of the middle class. It is widely accepted that big oil corporations and mining companies should not be allowed to devastate environments with no regard to the future ecological health of an area, yet in the U.S. political leaders create massive public pension debt, issue municipal bonds and engage in historic quantitative easing liquidity programs with absolutely no respect or regard for the financial health of future taxpayers. They are the financial version of environment-destroying capitalists. 

The only real solution may be to eliminate all public pensions, mandate 401K plans for all public employees, and require all financial transactions, such as municipal bond issuance, to conform to private sector rules. Government has empowered its agencies to conserve natural resources. It needs to evolve to where it conserves the financial resources of the middle class.