The Government General Fund

This post by Coyote reminds me of a pet peeve of mine.  Government always tries to foist off the fiction of a trust fund for something (e.g. education) vs. the general fund.  When NY State created its lottery, it was claimed that the money would not go into the general fund.  It was to be used only for education.

Does this mean that the state did not spend any money whatsoever on education the day before the lottery was created?  No.  The lottery merely displaced money that would have come from the general fund, to be spent on whatever program was politically advantageous (but not popular) at the time.

Old Budget                                          New Budget

$1 for education                                    $1 for new program

$9 everything else                                 $9 for everything else

                                                              ($1 for education from lottery education trust fund)

Congratulations, we’ve just (re)discovered the concept of fungible!  Money is fungible.

And the notion of special trust funds outside the general fund is illusion.

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