The Most Fun Story about Fiscal Policy You'll Ever Read (Really)

Last week I briefly mentioned an online sensation sweeping Hungary - the Finance Ministry's be-your-own-fiscal-affairs-supremo Internet budgeting game. Okay, so it's not really a "sensation," as only a few thousand people have logged on and participated. But it's still pretty damn sensational, if you consider that many national governments don't even know themselves what's in their budgets. So let's give it a whirl.

The game allows individuals to craft their own model budgets, based on actual spending figures in ten categories. Players are given a "baseline" budget of exactly Ft 84,469 (€341), corresponding to each Hungarian's monthly share of the state's projected 2005 budget, which should top out at an eye-popping Ft 10 trillion. Thanks to Flash technology and some decent art direction, the thing is a hoot to use; when, for example, you cut the budget for pensions, the smile on the old codger illustrating the section is replaced by a look of bottomless gloom. And that's with a cut of only 10%!

According to Finance Minister Tibor Draskovics, the objective is simple. "There is an important lesson to learn - that you cannot spend money that you don't have. We can only spend more on something if we spend less on something else or if we raise taxes."

Of course, what Tibi means is that real-world budgeting - or even imaginary real-world budgeting - is much easier said than done. While people can bitch and moan about there not being enough public money for their pet projects or themselves, once they are forced to find corresponding cuts in other budget lines, they are likely to moan a lot less. (Unlike in real life in Hungary, you can't raise taxes in the game.)

At least that's supposed to be the theory. I actually found plenty of stuff to cut out of the budget. In fact, in less than a half-hour I managed to trim the Hungarian state budget by just over 25%. And that's taking into account several large spending increases for activities I consider currently under-funded. Let's break out the green eyeshade and go line-by-line through the budget, which is reproduced nearby. The existing "baseline" budget is on the left, and my own, improved numbers are on the right.

Appropriately enough, we start with the category of State Administration and Taxes. Hungary has a fantastically bloated state administration. But don't be afraid, because worthless state bodies and workers are less like fat on your rump than the icky stuff inside a cyst or boil. In other words, they can be quickly and easily lanced and drained, leaving only a pleasant feeling of relief. By chopping the monthly per-capita rake of the country's paper-shufflers from Ft 3,703 to Ft 1,000, we can not only save a mound of money, but improve the quality of public services. It also allows us to double the amount spent on the administration of justice, to better ensure that the country's citizens actually get effective redress for their grievances in the nation's courts. Likewise, "foreign affairs" gets cut from Ft 450 to Ft 250 - let the EU take care of some of it - and political parties get fully zeroed out.

Unlike state administration, Defense and Security gets a slight raise, from Ft 4,270 to Ft 4,456. How a country that has spent roughly 480 of the last 500 years under foreign domination decides to spend less on defense than on TV reality shows I'll never understand. Meanwhile, I've doubled the paltry Ft 303 spent on prisons. Hungary is chock full of criminals - just read the tabloids - and you need a place to put them, other than in government.

Education and Research similarly gets a boost, from Ft 10,160 to Ft 10,169, thanks to a re-balancing of spending in favor of primary education. Let goateed 20-somethings who want to get an advanced degree in post-Lacanian gender theory buy it themselves. Likewise, why buy middle-class kids lunch, when their parents can pack one for them? Finally, under the Stink budget, R&D gets doubled.

Health Care gets a slight cut overall, partly to save money, but also for the purposes of shocking some sense in the system. Until hard choices are made about reforming the sector, more money only serves to entrench the beneficiaries of the current, dysfunctional system.

As for Social Affairs and Family Benefits, here I get a little radical, cutting the overall bill of Ft 15,447 by almost two-thirds. To be blunt, most of this aid does nothing more than turn middle-class people, or potentially middle-class people, into simpering dependents. There is a big difference between adequately financing orphanages and offering state subsidies for yuppies to build suburban dream houses.

You can probably guess that Retirement is the biggest line in the budget, and indeed it is, coming in at Ft 16,179 per man, woman and child. While you might also expect me to simply advocate smothering some of our millions of cotton-tops, I think this is both heartless and impractical. Hungary is not Holland. In fact, my budget package offers a modest raise for our pensioners, to a total per-capital monthly cost of Ft 16,500 (as opposed to benefit) in exchange for the old goats agreeing not to ask for more, and to get on with pegging off.

As for Leisure, Culture and Religion, all three strike me as the kind of stuff people shouldn't expect the government to pay for. But I'm willing to keep the budget line for cultural institutions and monuments intact provided we zero out spending on religion, media and, especially, "civil organizations and NGOs," which by definition are not supposed to be dependent on government.

The Economy and Infrastructure budget gets a similar re-balancing, with railways benefiting at the expense of air transport, telecoms, and some other things government has no business getting involved with in the first place.

In the Stink budget, Environment and Agriculture gets distilled into simply environment, on the rationale that whatever the government does in the areas of agriculture, forestry and the like should be geared towards protection of the country's rich but fragile natural heritage. Overall, the effort gets a slight raise for 2005, with more in the future if results suggest an increase.

Finally, we come to State Debt Management and Other Costs. Starting at the bottom, we see that Hungary's European Union dues total a staggering Ft 1,750 per Magyar-month. This is nonsense. I propose that we instead cut a deal with the EU to trade half of this against future claims for "Bridge to Europe" cultural events, hedgehog pelt subsidies and other pointless Eurobaloney we don't need or want, or perhaps for agreeing to go along quietly whenever France gets around to actually declaring war on the US. Meanwhile, the inevitable "miscellaneous" budget gets cut by half, to Ft 509. If whatever falls between the cracks is so important, make sure it doesn't fall through the cracks.

My guess is that the first thing most budget gamers go after is the main item in this last category, the financing of the national debt. After all, Ft 7,335 seems like an awful lot just for interest and principal payments on debts the average person doesn't even remember agreeing to take on. Unfortunately, it is also the one line of the budget you actually can't touch, lest the government's ability to borrow be destroyed. The good news, however, is that by making all or even most of the cuts and transfers I've laid out, the Hungarian state's borrowing costs would drop dramatically, leading to an immediate savings of Ft 2,000 per person, per month.

I know what you're thinking: It'll never happen, because the politicians are too weak-willed to risk the wrath of the voters. Maybe, but remember last great budget reform to be enacted in Hungary, the so-called Bokros-csomag ("Bokros package") of 1996, named after former Finance Minister Lajos Bokros, who was run out of the country for the crime of saving it from bankruptcy. The lesson of the Bokros-csomag is as obvious as any in history: As long as they can blame the pain on someone else, even Hungarian politicians are occasionally willing to do the right thing. Which is why, if they agree to adopt my budget, I hereby give Minister Draskovics and the other members of the government permission to call it the Stink-csomag, and to blame any resulting anguish or short-term pain it may cause on me. Why not - everyone already hates me anyway.