Anyone concerned about the long-term consequences of Washington's over-spending and borrowing should simply look at how our nation's Governors and state legislatures grapple with one of the largest collective state budget deficits in US history. In designing their 2010 budgets, the National Conference of State Legislatures found that states closed $145 billion in budget gaps last year- only to find that they face greater deficits in the coming years.
Something needs to change, and
change fast, because Washington
is on the same
course.
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businesses and organizations, and their members understand
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Given the fiscal mess in Washington
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The State of New York, for example, is now coming to stark terms with the dire fiscal shape of its years of spending and borrowing, with one of the largest state budget deficits in the country for the 2010 fiscal year ($9+ billion).
The state budget was supposed to be in place over 75 days ago, and the legislature has been deadlocked on how best to deal with the deficit. Albany has passed 11 weekly extenders that fund government programs for a short amount of time, only to kick the tough decisions further down the road (as the problems increasingly mount).
Combinations of tax hikes on soda, cigarettes and more, state worker layoffs and cuts to education and mental health services, and most recently talk of a government shut down, have taken many of the headlines on how to deal with their fiscal mess. Despite a $9 billion budget hole, a looming $15 billion budget hole next year, and the second highest debt of any state in the country, New York leaders are even talking about borrowing more money to pay for these problems. In other words, they want to kick today's problems off to future taxpayers.
While it is clear that unfettered taxing, borrowing and spending will leave governments in a fiscal disaster, the greater lesson in all of this is that the federal government is on the same fiscal path.
We are well on our way to tripling the national debt by 2020, and Washington continues to spend money we don't have. By borrowing and printing more money, we are taking a little bit more of the American dream away from future generations, every day, by kicking our financial obligations down the road.
Our nation's deficit just for
the month of May totaled $136 billion - and it is fast approaching the
$1 trillion mark for the fiscal year. The annual deficit - just for 2009 - was
$1.4 trillion.
The problems in New York, and other states with massive deficits like NJ, CA and others, should be giving federal lawmakers here in Washington a reality-check that the unsustainable federal deficits and big spending must be dealt with immediately. And the longer we put this off, the more painful it will become.
Still, President Obama has
written congressional leaders late last week asking for another $50 billion in
state and local aid to help protect the jobs of government workers, even though
as of June
4th, only about half of the total 2009 stimulus money has been spent with
some $381 billion still outstanding. As you probably recall, last year's
trillion dollar stimulus bill did nothing to create private-sector jobs and
left future generations of Americans with a hefty debt burden. Now that
stimulus money specifically earmarked to prop up state budgets has run out,
states are right back where they started two years ago.
As if more stimulus spending wasn't enough, earlier this week it was reported that the cost to taxpayers for fixing Fannie Mae and Freddie Mac could range anywhere between $160 billion all the way up to $1 trillion. These two institutions, which collectively own or guarantee roughly 75% of all US mortgages, are bleeding us dry as Congress is forced to continue to transfuse them with more taxpayer funded bailouts.
We must make a commitment to cut spending, cutting the deficit, and improving our financial position - now. Otherwise, we will end up like New York, facing weekly government shutdowns, massive spending cuts and very painful decisions in the years to come. It is our collective responsibility to get working on this now.
- Tim Murphy
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December 29, 2011 10:15 pm
