[Update] Bistro math with a side of well-cooked books

Have you read Douglas Adams' book "The Restaurant at the end of the universe"?

You should because Bistro Math powers the universe, including all modern capitalist based economies -- which, to some, are the universe.

That feeling from the teenage years, that adults had no control over their lives but worked hard to pretend they had, that feeling never went away. It is safe to say we were right.

The great recession and the number and statistics games played before, during, and after have reinforced the notion that our economies are very much out of control. The budgets we get to see tend to be either way too short or totally unreadable.

Over the past few weeks, we had fun going through a number of German government budgets and found that the states around here manage to publish budgets that are no more than a handful of pages long. Billions of Euros of public money shrunk down to just pages is a dream come true for anybody who engages in the most exquisite art of cooking books.

In the case of Germany, someone is getting filthy rich, but who?

Record tax revenues combined with major cutbacks to social services and social security mean there is free money somewhere.

Some goes to the European Union, some goes to support faltering economies like Greece, some goes into paying interest on government debts but are these the black holes some claim them to be?

We doubt it for one reason: focus.

There is a lot of attention being paid to these areas because so much power and political capital are riding on them. Of course, there is waste in these but if you wanted to cook the books, you'd try to avoid those areas.

The projects and budget items you want to scrutinize are those with bi- or tri-partisan support. Where legislation and budgets get passed quietly.

Even if they make bad news later, like the new Berlin airport, initially budgeted at 1.7 billion euros and now forecast to clock in at a grand total of 20 billion, too much money has been spent, too many highly prized nepotism fueled jobs filled.

Or the bloated, deeply entrenched "public" broadcasters with a public budget the size of the National Security Agency plus ad revenues.

The Bistro Math of budgeting is quite simple: If you take one dollar from 80 million people and give the money to 80 people, you create 79 instant new millionaire friends.

Don't ask about the one ingrate.

If you give one dollar each to 80 million people, you get a shrug at best or face public criticism.

Enjoy the side.

[Update 6 Feb. 2014]
So, a few days after this post, a study of the German economy after re-unification says that the oft praised cutbacks to the social safety net, the Hartz-IV reforms, were not the engine of the boom seen since the late 2000s.  The study by institutes leaning on the side of employers found that, contrary to the touted improvements, Hartz-IV came at a time when the economy was already well into the recovery and overshot its target.
By lowering wages and benefits too much, Hartz-IV is partly to blame for huge export surpluses and the problems in Southern Europe.

Which makes Hartz-IV a prefect example of Bistro Math.