Good people on the internet (CASE Ukraine) have done a useful thing — anyone who wants can now see how much they pay to the state. You enter the amount of your “net” salary and receive a receipt showing how much money at your income level you will give to the beloved government in a year. For example, with a “net” salary of 3,000 hryvnias per month, which, as they say, is the average income of a Ukrainian, the state will receive from you 31,724 hryvnias and 89 kopecks. Naturally, a sane person asks “for what.” The receipt roughly explains what purposes this money goes to.
Actually, this list is the subject of our interest, since it is very telling and explains a lot. For convenience, let us take not the numbers from your receipt, which are individual, but the consolidated budget expenditures (in billions of hryvnias): pensions — 253; education — 112; social protection — 67; economic activity — 66; healthcare — 62; interest on debts — 48; police, prosecutor’s office and courts — 42; bureaucrats — 33; armed forces — 21; culture and sports — 16; communal services — 14; environmental protection — 8. In total, the state spends 742 billion hryvnias. Let us note in passing that it manages to collect only 653 billion from you; the budget deficit is 93 billion, meaning these missing funds the state obtains elsewhere, usually by borrowing. This money it then pays out from your own taxes, and interest also accrues (in our case, this interest is 48 billion, an amount only twice smaller than the size of the deficit that these debts cover, but this is already details). Throughout the entire modern history of Ukraine, the Ukrainian government (and, in general, any other government, but now we are talking about ours) rushes around like a madman and thrashes about hysterically about where it can get money for the budget. Let us not recall the prehistoric Kuchma; I think everyone still remembers Tymoshenko’s premierships or Yanukovych’s presidency. So here — all this chaos, all these economic tsunamis and typhoons, all this insane regulation, manual control and terror has one main reason, one main justification — the state budget. Of course, all this continues even now, with new revolutionary forces. It is precisely these “efforts” of the state that cause the main damage to the economy (what are the “financial and monetary policy” measures of recent times worth). However, note that in our political-economic discourse, the question “why do you need such a budget?” is almost completely absent. All the battles are fought over purely local and particular issues, while the main question — for the sake of what this war of annihilation is being waged — always remains off-screen. At best, a bone is thrown to the public: “reduction of bureaucrats.” Obviously, no one likes bureaucrats, but look at the numbers — their maintenance is far from the main item of expenditure, and I am not even mentioning that any reduction always mysteriously turns into an increase in their number.
The list of state expenditures is precisely very helpful in understanding why things are exactly the way they are.
Judge for yourself. Let us simply go through this list. It is perfectly obvious that you and I can easily do without state expenditures on healthcare and education. These expenditure items, under conditions well known to everyone, simply look like mockery. Exactly as mockingly looks “culture and sports.” It is unclear why I should pay for someone else’s exercises in the fresh air or untalented vocalises. The item “economic activity” should also be eliminated immediately and without discussion, because the state and economic activity are things incompatible by definition. Whatever it may engage in, all of it should be privatized and given to people. Exactly the same, “social protection” should be eliminated — all these benefits and allowances for veterans of the Battle of Kulikovo. Unemployment, sick leave and the like are matters for the employment contract with the employer, insurance, mutual aid funds and other institutions of civil society, not the budget. Under “communal services” I think are understood the expenditures for keeping afloat all this monopolistic outrage in the form of housing maintenance offices, without which we will only breathe a sigh of relief. So from the initial amount of 742 billion, we will have a budget with expenditures of 405 billion, and, note, already without any deficit. Obviously, a question is ripening in the reader’s head — “but we will still pay for education, medical treatment and the like.” This question is “tangential” to the theme of this column, but it must be answered in at least two words. Yes, we will purchase healthcare and education services, but each will do it themselves, according to their abilities and needs. As a result, these services will be regulated by supply and demand, that is, by the needs of consumers, not bureaucrats. I think this is a satisfactory answer, although there are many more nuances here.
It is clear that society can easily do without the remaining expenditures, without all these bureaucrats, armies and environmental protections, but now I am talking about what can be done really within the next 3-5 years, moreover within the framework of the existing political paradigm. Even these half measures almost halve the budget, and thus make unnecessary all this running about of elephants in a china shop, which is what the government does. The beloved and carefully cherished problem of our state — pensions — also has its solutions. For example, one can hand over pensioners to civil society in exchange for tax exemption. There are at least two more ways to get rid of state pensions forever, if there were the will. By the way, without pensions, our budget will be only 152 billion, which, you must agree, already looks like a completely ridiculous figure.
However, my goal is not to substantiate the reduction of state expenditures and their specific mechanisms, which I would, of course, not undertake to do without going into details and, all the more so, within the framework of a magazine column. The purpose for which I provide these very generalized figures is to show that in any case, even if one shows every possible indulgence toward the state, the size of its expenditures could be easily and effortlessly, without any damage and even with great benefit, reduced several times over, without even changing (which is important) the existing political paradigm, in which the state is considered “on the whole useful.” And this helps, it seems to me, understand the following things.
The state is directly interested in the growth of its own expenditures. Not some “social problems” compel the state to increase expenditures; on the contrary, the state itself creates and cherishes these problems, demanding ever greater expenditures from society. A classic example here is the war on drugs that has been waged for 40 years, which only the lazy have not recognized as lost, but which, despite this, will continue for another ten years or so. The more expenditures the state has, the more its power. Expenditures legitimized in the eyes of society generate power, which is then used to legitimize new expenditures and obtain new power, and so on until complete social collapse. The state is also directly interested in a deficit of funds for its expenditures, which gives it a reason to demand extraordinary measures, manual regulation, confiscations, etc. In general, the state as a whole and bureaucrats in particular need power and the opportunities it generates. And the budget with its expenditures is a reason to demand and receive this power; the causes and consequences look precisely this way.