Posted on 02/05/2025 2:27:32 PM PST by TigerClaws
"Zero-Based Budgeting."
Sure seems like what's going on. Justify every dollar spent. Use most often when a new owner takes over a failing company.
A bit to see Carter mentioned as he certainly expanded the federal bloat (added Department of Education, for example.)
Here's what ZBB is:
Zero-Based Budgeting: Definition
In the zero-based budgeting (ZBB) approach, all organizational activities are initially set to zero. ZBB is the newest approach to budgetary planning and control.
The approach was successfully developed and implemented in the 1970s by Peter A. Phyrr.
It was further popularized in 1979 when President Jimmy Carter of the United States required its use for the federal government. Zero-Based Budgeting: Explanation
The premise that underpins zero-based budgeting (ZBB) is twofold.
First, ZBB attempts to break away from the past in terms of the activities mandated, their budget allocations, and their expected increments.
It suggests that service departments should justify their annual budget allocations from the ground upward.
Any previous allocations in the past are not considered, and the focus becomes one of emphasizing future objectives and goals.
Secondly, while many organizations may not find it difficult to correlate specific activities with expenses like salaries, telephone calls, and machine maintenance, there is no fundamental questioning of the activity itself.
ZBB goes as far as to prompt the question: Do we need the activity or service in the first place?
While ZBB has received mixed results in many firms, it has one powerful advantage in addressing these drawbacks: namely, it implies a constant review of activities and priorities by those directly involved.
In turn, the costs involved can be assessed in a structured fashion. They can also be ranked in order of importance with other equally pressing needs for resources.
The traditional budgeting method, in contrast to ZBB, takes the current level of operations as the starting point for developing the future year's budget.
In the traditional approach, it is assumed that all previous activities are essential for achieving the ongoing objectives.
However, important limitations of the traditional approach include:
Budgets tend to get larger and larger over the years as inefficiencies of earlier years are carried forward
New projects receive a raw deal, being more susceptible to being dropped if budget cuts are necessary
Alternative ways of achieving the same objectives are not identified, meaning that things are taken for granted
Key problems and decision areas are not highlighted
With these limitations in mind, the traditional approach of using the existing budget as the starting point for developing the next budget needs reappraisal.
The second approach to budgeting is ZBB. Peter A. Phyrr, the creator of the approach, defined ZBB as follows:
An operating, planning, and budgeting process that requires each manager to justify their entire budget request in detail from scratch (hence zero-based) and shift the burden of proof to each manager to justify why they should spend any money at all.
ZBB starts from scratch each year and places less emphasis on what was budgeted in the past.
The approach involves evaluating and reviewing all activities and programs based on a cost-benefit analysis. Key Elements of Zero-Based Budgeting
Identifying objectives and developing an operating plan and budget for the coming year. Identifying alternative and efficient ways to achieve the current activity. Evaluating budget reductions and expansions systematically to allow for a re-allocation of resources as per the organization's priorities. Diagnosing unnecessary activities that budgeting may perpetuate.
I always wished that the gov had to follow a budget like any business would. I was always told that it would never work. never quite understood why... but glad to see this! I am afraid I will have perma-grin after four years of this!
I’m curious as to how to pronounce Peter Phyrr’s last name because all choices are….unfortunate.
I want govts to have to follow GAAP and publish their stuff just like any public corporation - but at a greater level of detail allowing anyone to see where the money is going.
The one exception being a single line each for defense and intelligence - still see the number just not necessarily where the $ is specifically going. A classified version of the details would still have to be made available to Congress for proper oversight.
I want to see the Fed audited.
There are one or more Freepers who pop up once in a while to assure us that the Federal Reserve is constantly audited. And always passes with flying colors. Totally above-board. No funny business at the Fed! But I’m hoping Elon eventually gets over there to have a look at how the money flows. I think the story might change.
Where is the budget for area 51?
ZBB was one of the reasons I liked Carly Fiorina.
Coming out tax dollars paid celebrities to back Ukraine.
Angelina Jolie got $20 million.
$68 million went to the World Economic Forum.
San Fran Nancy got $90 MILLION for AIDS in San Fransisco.
NYT, Politico, Reuters, BBC - all got millions of tax dollars.
There was a recent whistleblower in UFO world—no need to go into details here—but what he said about the black budget was stunning.
He said that he was given years of training in various skills by military, intelligence agencies and private contractors (most recently used—helicopter pilot).
Then he would take a “cover” job for say—army intelligence.
It would be a boring job—but then once a month or so he would be called away for “black ops”.
They never told him in advance what the black op was or where it was or how long it would last.
His army “boss” was just told that was how it was—and to keep his mouth shut.
Getting back to the budget—that means the Army would have black operations (that may have absolutely nothing to do with the army) hidden in it and it would look like his unit had a “slacker” in the ranks and the army was wasting money.
What a mess.
I worked for a large city in their “Sign Ordinance Department” for a summer during college. They had 32 students in the Department, but I looked around and there was only 3 of us working. So I asked the Supervisor why they had so many employees that weren’t working. He said that I didn’t understand how Government work ‘works’. He had a budget for 35 people, and that if he didn’t keep them all, they would reduce his department appropriately and his salary would go down accordingly. I was astonished, but glad I would end up in a Science field instead of Government work...
Musk is doing something more ambitious, a full forensic audit, tracing the spending from budget line to actual recipient.
It is more likely a process reengineering type of thing.
Review the “transactional data”, look for low hanging fruit, then find ways to reduce the cycle time 35-50% resulting in staff and expense savings.
I did this stuff for years in three industries. It works. It is painful for those who are tied to the old ways.
I have seen these types of bombastic reactions many times; just never at a national level. LOL
First choice would be FIRE if the y is pronounced as a short e. The y in the middle should not be pronounced like an ee because it is not at the end of the word. Phyrr would be pronounce very similar to Pyre with an F.
Second choice is FEAR, and this would be if the y sounds like a long e or ee, as it often is at the end of words.
Third choice would be FUR. Short e, single r. In this case the yrr would be pronounced like er.
FOR would be a reach because I dont know of a word where the y could be substitued for either a long or short o.
Same with sounding like a short or long a, so FAR and FAIR are out.
Peter Phyrr “FEAR”
I have advocated for this approach to all governmental funding...Federal, State, and Local.
It makes sense. It forces detailed reviews. It helps protect the American Taxpayers.
No reason to NOT do it.
But, start with an AUDIT, too.
Poor guy.
I’d already worked those out, hence my comment.
All unfortunate.
* maybe an umlaut would help.
Bkmk
Some of us have been saying for years, to anyone who would listen, that the way to get spending under control is to blast the Congressional Budget Act of 1972 and all of its spawn to smithereens and go back to ZBB.
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