Wednesday, July 15, 2009

Colorado, Crisis, and a Larger Reflection (Updated)

Somehow this, from the Denver Business Journal:

A forthcoming report by a research center at the University of Denver says Colorado’s state government faces a looming financial crisis, DU said Monday.

The report from the Center for Colorado’s Economic Future at DU is titled “Colorado’s State Budget Tsunami.” It is to be formally released Tuesday.

“There is simply not enough money to pay for the government we have created,” the report says. “Barring a quick and dramatic turnaround of the economy, it appears that the current fiscal system cannot be sustained.”

In announcing the report’s findings, DU noted that “anticipated fiscal demands for K-12 education, prisons and Medicaid will swamp today’s revenue-generating tax and fee system” in Colorado.

Doesn’t square so happily with this, from this morning’s Denver Post:

Thousands of low-income Coloradans reliant on public assistance could get a free cellphone under a plan before the state Public Utilities Commission.

If approved, the plan by TracFone Wireless in Miami would make Colorado the 17th state it has settled into with free cell service for the indigent, a form of wireless welfare that proponents say taps into one of the last untapped markets for the telecom technology.

Certainly, the money comes from different buckets. Our financial crisis is one based around a general fund that doesn’t quite pay for the soup of services, handouts, freebies, and bureaucracy that voters and lawmakers have built up in Colorado. The free phones will be paid for by fees that the rest of us non-free users pay on our existing phones. Which is to say, those of us who actually pay for the service subsidize those who do not.

My problem, then, is philosophical in nature: in this country we continue to push the bar higher and higher on what constitutes a right even against all evidence that we can’t actually pay for what we promise. No service is unlimited, no pot of money is bottomless, and good economic times don’t last forever.

With our nation bleeding red (and my state’s politicians, who know that they don’t have the votes to raise taxes, finding creative ways to raise fees on everything from getting married to milking cows) why are we finding ways to spend even more money on things that can hardly be defined as core functionality for our government?

And that report about Colorado’s economy? It’s hard to imagine that you couldn’t read our nation’s future in its words, too.

The problem is that our government is built to constantly grow, but it doesn’t have a mechanism for pulling back when times get tough.

When you, as an individual, face a tough month, you probably cut back on eating out or some other indulgence. At the same time, you pay your electric bill, your mortgage, and make sure you still have some left over to buy food. You have a priority list that defines what you need instead of what you merely want. Or, at least, you should.

Government, as dumb a beast as there is in the world, doesn’t recognize the difference. Once a thing is voted on and the money starts flowing, it’s a perpetual need and it often contains some mechanism for automatic growth. The government almost never steps back and says, “Yeah, that’s a nice service, but I can’t afford it this year. Let’s just not do that for a bit.”

Colorado’s TABOR (Tax Payers Bill of Rights)--which requires votes for tax increases, sets standards for government growth, and contains a ratcheting mechanism to decrease spending in times of hardship--was meant to address that. And it does, but TABOR has been undermined by voters, too (quite likely by many of the voters who helped establish it in the first place). TABOR says that you can’t raise taxes without the consent of the citizens and that spending has to contract in bad times. Other spending bills over the years have mandated increases regardless of the economy. Which is why that study cited in the DBJ story goes on to say this:

“Education, prisons and health care consumed about 54 cents of every general fund dollar a decade ago. They now eat up nearly 76 cents of every general fund dollar, and that figure will jump to 91 cents in five years if the average growth rate continues. Eventually, at this rate, there would be no money for other programs.”

The solution, to me, would be found in fiscal responsibility or finding programs to cut. That wouldn’t be the government way, though. The government way is to find some backdoor path to the citizens’ wallets.

And it almost always starts with someone saying variation of, “We’re the richest country in the world. Why can’t we spend just a little more and buy lunches for poor students?”

Or buy cell phones for the poor. Or fund massive new health care mandates. Or “protects” us from climate change with a massive and complex system of taxes, payoffs, and giveaways that no one fully understands.

Republicans utterly failed to hold back the tide of spending when they held the House, Senate, and presidency; a failure that speaks volumes about the almost intractably expansionist nature of government and a broader failure of the GOP to actually embrace the conservative values that it has so long preached. It’s no wonder that the citizens didn’t trust Republicans to be good caretakers of the nation. That doesn’t excuse the left’s--especially the progressive left’s--bullying us down the road to ruin just that much quicker.

But it’s not all gloom. Some enterprising souls are still finding ways to grab with both hands.

Rep. Ed Perlmutter of Colorado inserted a provision into the recently passed House climate change bill that would drum up business for “green” banks, such as the one he has invested in and his family and a political donor helped found in San Francisco.

The bill calls on bank regulators to promote green banking and says federal dollars should be used to support energy-efficient home improvements at government-funded housing projects.

Mr. Perlmutter, a two-term Democrat, has two investments in the 3-year-old New Resource Bank, which calls itself the nation’s first green bank. Among other environmentally conscious banking products, the bank offers home equity loans for consumers to make their homes more energy efficient, in addition to construction loans for green builders.

See? The American dream lives on.

Update: A similar question from Foundingbloggers. A wonderful site for conservatives (but you’re probably already a fan, aren’t you?).


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