Why Local Governments Can’t Stop The Spend

50 of the 75 largest US cities are currently operating with budget deficits. While 100% of American Federal Governments are operating with a budget deficit, the Federal Government faces constant scrutiny, but these cities avoid scrutiny even while in close proximity to the communities they overspend for. It would be far easier for people to pressure their cities into more fiscal responsibility if they cared, but very few people want to put their time and energy towards such a thing. The mismatch between attention and agency is the first reason for the inability of cities to operate with a surplus. Additionally, the classic buy now pay later mindset is seen in all forms of government. People will not be able to stand up for limited spending until objective values can be openly invoked in public debate. All governments must make expenditures, and it is only possible to draw and justify a line between necessary expenses and waste if we can step above the language of mutual agreement to universal truth.

While cities and towns mediate a great amount of our interaction with governments around the world, they receive far less of our attention than the national government does. We do not realize how much power they actually have, and thus put our energy towards countless other things that would have less ability to meaningfully improve our lives. Attention is upstream from political action and political action is upstream from government. Until this disconnect is solved, local governments will operate in a sort of limbo, trying to act without receiving too much scrutiny. The current tendencies of Americans makes it too easy to exploit this gap of attention. While there are far more natural barriers to the endless expansion of local government, the attention dominance of the Federal Government makes the reactions of the people towards the local government much more tempered and slow. This problem with attention allocation cannot be solved by governments themselves, but rather should be solved by local attention, which could create institutions more conducive to holding the attention of the people. Although it may be difficult to change your institutions to ones that thrive under scrutiny rather than away from it, once it happens, we will be able to reap the benefits for decades. Attention is unenforceable, but some institutions are built to avoid it while others welcome it.

Every form of government with elected officials chosen by the people has a natural incentive to spend in the present and defer the cost until later. While this effect can often be mitigated in local government, it is still fundamentally present. The government naturally expands to the very limit of what it is allowed to satisfy the current people at the expense of the future people. This is built on the assumption that the present is certain, and the future is not, and as if the fleeting benefits of current consumption could somehow secure a bright future. Keynesian logic is the most dangerous tool of this incentive, as it gives a theoretical justification to the thing that the state would already want to do. When theory becomes the servant of incentives rather than the guard rails of it, it becomes far too easy for spending to expand. Most people know that running budget deficits every year is bad, people simply don’t like to cut back and they don’t care about their future selves or children as much as they care about themselves in the present. The irresponsibility of the federal monetary system compounds every measure of fiscal irresponsibility through the inflation of the currency. Until more basic norms of responsibility are established at all levels of government, it will not be reasonable to expect local governments to be more responsible than they are forced to be.

A large and vocal group of people will always want to spend more. In a world where the majority determines what is right, it is impossible to tell them that they are wrong. However, by accepting universal values, like the right of the individual to freedom and life, or the objective good of citizens living responsibly with the fruit of their own labor, we can stand up to the majority and say “no.” Majority opinion is not and will never be the ultimate source of what is right. When the majority diverges from the objective values that allow the existence of freedom, they must be corrected and the guard rails of government must be reinforced. A government that wants to sustain itself cannot be founded on majority opinion. Some values are truer than others, and the government that best protects and upholds them will be the most just and the most durable. The people will always want to spend more, but only with a system of values beyond popular demand can we stop the endless spending.