by Jack Lee
Will Rogers once quipped, “The public feels the same about Congress as when a baby gets hold of a hammer.” There has never been a time in our nation’s history when that quote seems more poignant. Social Security is broke; the FDIC is broke, same for Fannie Mae and Freddie Mac. The heavily regulated Amtrak has never even reached break even, and Medicare and Medicaid are unfunded mandates that can’t even meet the demands of baby boomers. Now we’re going to add Obama-care into that pile of unfunded mandates? This is insanity.
We are broke! Our public debt is piling up at an astonishing and unrelenting pace. Middle-class wages have sagged. Unemployment is remaining high and by all accounts it will take many years to fully recover from the recession.
“The Fiscal Survey of States,” released by the National Governors Association and National Association of State Budget Officers, estimates general fund spending will be approximately $45 billion less in FY2010 than in the year prior. The feds cut 11% just the year before for programs they have imposed and the states can’t pick up the slack. Since the beginning of 2010, 36 of our states have experienced major funding gaps – the red ink keeps flowing.
What happens when states go broke? Well, for one it exposes all the slick accounting tricks they used for years to create the illusion of a balanced budget. New York has been hiding their growing annual deficits by selling hundreds of millions of dollars worth in bonds and auctioning off key assets just to make ends meet. But, that plan always has a day of reckoning. Now New York is flat broke, nobody wants their bonds and there’s almost no more assets left to sell. They are desperate and looking to the feds for a bailout. The feds answer, print more money and raise taxes!
Being broke mandates severe cost cutting and for people addicted to both the spending and the entitlements, well, this is not going to become a time of agonizing withdrawal.
They all knew it, Congress saw it coming and still they opted for creative financial solutions to buy more time. Nobody wanted to man-up, instead they kept putting this growing problem off to a future time. And let’s not forget, it was NOT just spending, our government watchdogs failed us too – Wall Street bankers got us good and it need never have happened if only Congress was doing its job instead of concentrating on placating special interests and fund raising for the next election. There’s lots of blame to go around.
So you can see this misery is mostly self-inflicted by the very people we trusted and put in office. For years voters have been electing salesmen, not legislators. They didn’t want the straight talking, frugal candidates bent on attacking waste, fraud and abuse. They wanted to hear what government could do for them instead.
Too many voters ignored the conservative’s pleas to gain control over this spending frenzy. That got us munificent retiree plans that kept growing more lavish, habitual pork spending grew too as did its partner in crime – vote buying. Simply, too many voters didn’t want to hear the word, cut, even though we were on a course to certain financial ruin if we didn’t .
Now we’re looking at a likely return of the recession, before we even felt the recovery. But, here’s the new reality, we’ve played all our cards, we have no fall back. We either survive trudging up a mountain of debt (six trillion dollars high) or we will slip back into recession. And remember in a severe recession. . . depression is never far behind.
There’s no tooth fairy and there’s not going to be any great bounce back in year or two as the salesmen in Washington tell us. President Obama’s fiscal policies have been a total failure and now we either make it or else, we have no more safety nets.
Some of us thought that a depression could never happen again thanks to FDIC and Social Security, but they’re broke too. Sure, the feds can always print more money and they have by the trillions, but there’s nothing backing it up. It’s time for this charade to sink in. If we skid into a depression those trillions in paper money will be about as valuable as that roll of tissue next to the commode.