The Universal Financial Mess
Sometimes I think our “leaders” in Washington want us all to become ostriches. That’s right, they want us to bury our heads in the sand and ignore everything that is going on around us.
As I write this column I am seeing footage of riots in London which were sparked – at least in part – by the government announcing that its spending would have to be cut to get the nation’s financial house in order. Here in Frederick County everyone seems to be telling us that things aren’t that bad, and that we don’t have anywhere near the problems that they are facing in Europe.
We just witnessed an unprecedented display of dysfunctional government in Washington during the debate on raising the federal government’s borrowing limit. All that came out of it is the ability of the federal government to borrow more money, with no real plan to get a grip on our national finances, and a downgrade of our national Triple A credit rating.
The United States AAA credit rating survived two world wars, numerous other armed conflicts, a great worldwide depression, massive social upheaval, and assassinations and resignations of presidents. It could not survive one full term of Barack Obama and the pathetic Congress that does his bidding in Washington.
We have become a nation of addicts, addicted to our governments' over-spending and entitlements. The first thing an addict must do is admit that there is a problem. I believe many of us are still in denial, as we listen to – and do not question – Washington’s assurances that everything is just fine. In fact, we need major changes in how we collect and spend money if we really want to get our hands around the problem.
And, as bad as things are at the federal level, they may even be worse in Annapolis. Our one party Democrat monopoly of state government has managed to continue its “business as usual,” free spending ways, thanks in no small part to money transferred from the federal government that came out of the Obama stimulus package. Those payments are over.
What did they do last year to face the tough challenges ahead? They passed a new alcohol tax and directed almost all of the money to three jurisdictions, Baltimore City, Montgomery and Prince George’s counties. It is no secret why that was done: the O’Malley Administration wants to make sure that they have those votes in a block to pass whatever additional liberal ‘tax and spend’ legislation the governor supports during this, his second term.
Keep your eyes on your wallet. Over the next eight months we have to endure not the usual one, but two sessions of the Maryland General Assembly. You can bet that they’re going to dream up some new taxes to shove down our throats so that they can continue to buy votes with their entitlement programs.
Locally, we are trying. The approved budget in Frederick County peaked at $476 million in 2009. By 2012 it has been reduced by $27 million to $449 million. Where did all that extra money go in 2009, 2010 and 2011? Remember spending was only reduced because they had to, not because they wanted to.
The truth is that it went to fund the big government/big spending ideas of past Board of County Commissioners. We have had to make some cuts in services to reduce the budget, but the only complaints I hear from anybody who pays taxes is about the closing of the recycling drop off locations. This was a choice that was made in conjunction with our long term plans to overhaul our entire solid waste disposal procedures. I am convinced that what we are doing is in the long term best interest of county taxpayers, and we intend to see it through.
We also intend to see through getting a grip on our current structural budget issues. The truth of the matter is – in spite of what you may hear from those who want to preserve their big government/big spending ideas – that we must match projected recurring revenues with projected recurring expenditures on an annual and ongoing basis. This is the only kind of balanced budget that is truly balanced, and we are working as hard as we can to change the entire culture of local government from “spend it if you got it” to one of fiscal and financial responsibility and accountability.
On a final note, I was extremely disappointed in one aspect of the recent Republican presidential debate in Iowa. In response to one question, all of the candidates raised their hands and said they would oppose any proposed budget deal which contained increases in taxes, even if the increases in revenue were matched 10-1 in spending cuts. If I had been on that stage, I would not have raised my hand, and I would have said “yes,” I support raising additional tax revenue: from the one-half of the people who live in this country who pay no federal income tax whatsoever.
Everyone needs to pitch in and do their part to help us all out of this mess. If you don’t like what we are doing on the local level, please feel free to call and let me know about it. However, if you do call, please give me the courtesy of providing some solutions of your own.