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Election ’12?!?

If only I could be the government

It’s tough around here. I’ve picked up some expenses, with a new house two years ago, a child last year, some unexpected maintenance this past year, and now some inflation. Yet, I manage to keep the household above water. I do this in spite of lacking two things that certainly would help:

  • The ability to force involuntary payment to me.
  • The ability to print money
The state of Illinois can do the first, and the federal government can do both. With both governments facing an explosion of entitlement spending soon — and already huge debts — our executive leadership has opted to force me to pay more.
So I go my merry way making changes in the way we spend money. We cut back where we can and we have no choice but for it to be enough. Making more money is attractive, but it’s never guaranteed. The only thing you can really guarantee is how much you spend.
And so it goes with tax receipts. We raise taxes and project what economic activity (which more taxation will necessarily discourage) will generate what income. And then we hope the projections pan out. Meanwhile, we haven’t done anything to confront two of our largest economic problems: productivity and inflation.
This year, Paul Ryan came up with a serious budget plan that contains serious spending cuts. These are hard choices as they will affect more than half the electorate. President Obama responded with an unserious speech that seeks to bring income taxes last seen more than a decade ago.
Whose budget will be more successful?

Tough Decisions

Politicians love using that phrase. Who doesn’t want to embrace the candidate willing to take the heat and make those infamous “tough decisions?”

Well, while the governor in Illinois is busy pandering to various constituencies passing next-to-meaningless legislation, our state continues down the road of state pension hell. It’s simple really. The state’s employees have “defined benefit” plans, and as the benefit plans negotiated locally get better, the state’s underfunded pension plan picks up increasing liabilities that the state is on the hook to somehow pay.

In Wisconsin, Gov. Scott Walker recognized a problem with the public sector union-government relationship. Negotiating with elected officials is not a fair fight. Sometimes, it’s akin to collusion. Labor is a political player on par with any PAC in business today. You don’t want to get on labor’s bad side. So if some elected officials or political appointees neglect their duties to the taxpayers, big deal.

And if you can negotiate health and retirement benefits with the union, you’re postponing the costs, “kicking the can down the road” as the President is so fond of saying. The good feelings happen now. The bills come later. Much later.

In Wisconsin’s case, the defined benefit timebomb was set to hit over the next five years.

Walker felt that concessions weren’t enough. If state employees could collectively bargain for defined benefits, this battle would only give temporary relief to the taxpayer.

So now the unions are angry. Will Walker survive re-election in 2014? My guess is no. But don’t complain about the dearth of politicians with the courage to make the tough decisions.

Permanent Campaign Mode?

It’s good to know that the guy who promised “change” in the way politics is done has amped up his campaign operation before he’s been sworn in for his first term.