It’s time for our local, state and federal political leaders to start over. Clear the ledger. Forget the promises. We don’t have the money. And we certainly don’t have the moral authority to steal any more than we already have from future generations. Be honest about what government can and cannot afford.
It’s the quickest way to a solution. It’s why bankruptcy exists. It’s a reckoning with reality that avoids prolonging the agony and things being made worse.
Would there be a legal fight if such a course was followed? Yes — and so what? Let the judges pretend they can order tax collectors into the streets. The Wall Street Journal just had a story about one such legal fight:
The legal fight over California’s attempt to balance its budget.
The National Center for Policy Analysis recently summed up a Reason.com article:
America’s financial situation is unsustainable. In 2009, the federal government spent $3.5 trillion but collected only $2.1 trillion in revenue, resulting in a $1.4 trillion deficit, up from $458 billion in 2008.
We all know it’s not just the federal government. State and local governments have also over-extended and are now insolvent. They can’t pay all of what they owe and what they have promised.
We can either spend the next decade or more wrangling and making this more painful by delaying the inevitable — or — we can start fresh. Bankruptcy is the ultimate sign of failure — and in this case, it’s a sign that we understand reality. Our governmental leaders have failed — every other course of action is a waste of time.
During the past several decades politicians made ever greater promises to countless constituencies – from recipients of government assistance to government employees. We’re now past the point that government (that is, taxpayers) can fulfill all of those commitments.
Taxpayers can no longer afford the government that has been amassed. I’ll leave it to the more artful communicators to say it more flowery than this: the money is gone.
The Institute for Truth in Accounting has the federal debt numbers: we’re almost $13 trillion in real debt and almost $75 trillion in unfunded liabilities. Again, that’s just the federal level.
My argument isn’t to default on the real debt. We’ve borrowed the money and now we must pay. My argument is to clear the ledger of the $62 trillion unfunded liabilities and begin with a clean sheet of paper.
Revenues to the treasury brought in at tax rates that allow for growth — that’s the money we have to work with. And no more. From that total must also come the funds to pay down debt. That means the meat axe must be taken not only to promised entitlements but also to other existing programs and agencies. Revenues must exceed expenditures so funds are available to pay down debt.
If this is too simplistic for you — well, I can’t wait to hear your “new math” answer to the simple arithmetic of over-promised and over-extended government.
Today’s Wall Street Journal had an editorial titled:
A scheme for taxpayers to cover mismanaged multi-employer plans.
Here’s how it opens:
Feeling tapped out after stimulus, ObamaCare and everything else? Senator Bob Casey has one more deal for you. If the Pennsylvania Democrat gets his way, U.S. taxpayers will also pick up the astonishing tab for poorly managed union pension plans.
Most American politicians today are now certifiably insane. We should commit them to an asylum and get on with dealing with reality.
