The end of the line is rapidly approaching for unsustainable government spending. The states will be the first to reach that station.
The arrival will be a painful crash. The impact will reshape much of the US government policies of the past half century. The triage of those affected will raise bloody howls of anguish, and none will escape the effects.
Those who survive the fittest will be those most adaptable to a renewed America of more effective use of personal and financial resources. All will face difficult choices. True need will be better defined, to protect those really unable to cope. True merit will be better rewarded.
Most agree that the root cause of the crash, the bulk of most of the deficits, is bloated government policies and the agencies that implement them. Some argue, instead, that the gap be filled by increased taxes, not facing that spending excesses will then require more again, further reducing the incentives to produce and afford taxes.
I’m not one to say that government workers goof off more than private industry workers. It’s not their work ethic that I fault. It is the policies that political leaders set them on that are at fault both for the financial ruin that most states and the federal government face and for the frustration expressed by taxpayers over servicing a better paid civil service than themselves.
A conservative commenter thinks that President Obama will act with his “natural tendencies to ‘rescue’ and ‘control’ things” and that “The nature of his response could determine his tenure at the White House.” A liberal commenter thinks that former US Senator Alan Simpson’s remark, that “the blood bath will be extraordinary” in April when the federal debt limit comes up for a required vote to increase it, when – the commenter fears – “we can only hope that the nation that emerges from that blood bath is still one we recognize.” (Republicans will require spending cuts.)
The public mood is contradictory. Most want someone else’s ox to be gored. Increase someone else’s taxes. Cut someone else’s entitlement. Slash government payrolls. Don’t eliminate the program that benefits me.
This time, however, as in the case of California’s continuing $25+ billion structural deficit, over a quarter of its budget, there are no more cans and the end of the road is before us.
Leaving it to the politicians has meant cost-cutting nibbles and kicking the can down the road with accounting tricks. Court challenges have often resulted in reversals of spending cuts, due to judicial quibbles, activism, or faulty drafting of the cuts.
Federal legislation would be needed to allow states to declare bankruptcy, or to forbid bailouts of the states, or the Congress may simply refuse to bail out the states. More howls, and more judicial meddling. But, it is the necessary next step, if Congressional budget-hawks have the wings to withstand downdraft counter-pressures from many voters at home and, instead, soar to responsibility. State legislators and governors will be forced to make hard choices.
At the state level, civil service unions will have to renegotiate contracts. Program excesses will have to be trimmed. Some taxes may be raised. There will, then, be carry-over to federal programs. There will be increased demands to trim spending mandates imposed on the states and to trim other federal programs that will be seen as excessive in light of the dimmed largesse of the states.
All will enter a new America, in which there is a more direct connection between one’s own views, own comforts, and own efforts. It will be a difficult adjustment for all, painful for many, and would be a welcome improvement. The alternative is greater difficulties and pain for all if we allow complete insolvency and dissolution of assets by avoiding the confrontation with realities.
Tracked: Nov 22, 13:10