Time to bring our aircraft on this journey up another 10,000 feet! We’re going to get a higher altitude perspective. This week, I’m busting past my pay grade to join the chorus about federal spending habits. Here’s the thought: I think we are insane to couple open-ended entitlement programs to the general government!
What do I mean by “the general government”? We’re talking about the basics — that is, law and order, maintenance of our rights and a representative democracy. You know, the don’t-give-it-a-second-thought stuff that stands between us and the jungle, brought to us courtesy of the courts, law enforcement, the legislature and the executive branch. Soon after your first swearing-in as a legislator, a light bulb flashes on, and you realize that keeping these essentials running is the most important responsibility you have, even though they are far from the most expensive or talked about obligations of the job. Or, to flip the coin, think of it this way — mess up the general government, and you’ve totally betrayed the nice people who voted for you!
Looking at our state, we’re in pretty good shape, with no looming danger to our general government. In fact, we are profoundly blessed to have a state constitution requiring a balanced budget. One which, even better, limits Georgia to no more debt than can be serviced by 10 percent of the previous year’s revenues. Better yet, that limited amount of debt can only be used for capital or infrastructure purposes. The bottom line: our General Assembly couldn’t bury us in mountains of federal style entitlement debt, even if it wanted to. The most it could do (while still exasperating!) is to ratchet up taxes for more pay-as-you-go entitlements. Going off the deep end with debt is not an option. Watching our system in action has made me a believer in a balanced budget amendment to the US Constitution!
Meanwhile, our federal government seems dead set on piling up more mountains of entitlement debt. Can we stop it? No, not without that amendment! In eight decades since the New Deal, one undeniable verdict on entitlements is in: most entitlement programs grow far beyond any initial estimate, often geometrically so. Can you know how future demographics, technology and culture will affect an entitlement system? Heck no, though you can definitely expect them to make cost estimates look like they were made by an amateur! Sooner or later, those federal debt mountains will grow to the point where they can’t be serviced, much less retired, be that years or decades down the road. Thirty five years ago, we had a debt equal to a third of the nation’s economy, and no one would’ve believed we’d have one larger than the whole economy without World War III — yet here we are. More frightening still, over 45 percent of that increase piled up during this recession!
Now, stop a moment and catch your breath. There, hopefully that prepared you for the next fact. The unfunded liabilities for future Social Security and Medicare demands alone are several times our present federal debt! On our current course, federal budget difficulties will eventually become intense… entitlements and interest on the debt will outstrip our ability to pay. HERE’S THE POINT – the resulting wobbles of the federal government will put its general government functions in question, and our lives, freedoms and possessions at risk! I don’t know if our state government can survive the fallout of a federal implosion, given all the ties between the two. To use a word in the vogue, let’s call this “unsustainable government”!
Think I’m being an alarmist? History has not been kind to nations struggling with debt. Look at much of Europe, with its more advanced welfare states, during the recession. A number of these governments have been under extreme pressure — and this has been a sharp recession, not a depression. Look at post-World War I Germany, unable and unwilling to shoulder vast war debt and obligations to the victors. Or the royal regimes of pre-revolutionary France and Russia, staggering under war debt. In some of these examples, governments failed, and in others they survived. But in all cases, citizens faced times of great fear and uncertainty, and in some they saw wholesale destruction of wealth, abrogation of rights and even violence in the streets! Yes, today’s America is many times wealthier than any of these examples, but the political and economic pain we already suffer show that we’re on the same road.
Could we handle it, if the government actually failed? No! Many Americans are not remotely ready to understand, much less deal with even a temporary period of disorder. And don’t assume we’d get our rights, freedoms and democracy back. It hardly seems possible for our now dramatically divided people to come together and create a worthwhile new government, from the depths of disarray.
Call me a doomsayer, but our federal government is playing with fire! I don’t know if it is legally or constitutionally possible, but if we must have entitlement programs, maybe they could somehow be transferred to an institution separate from the general government. That way, a bankruptcy wouldn’t bring it down. But this is still wishful thinking, and for a couple of reasons. You’d have to give such an institution the power to tax, a serious danger all by itself. Also, the fiscal and monetary pressures created by vast spending and debt, even if tied to a separate institution, would still endanger the value of the dollar and the economy, no matter where they came from.
So really, there’s no escaping the infernal logic of debt. It will ultimately put our lives, liberties and property at risk. I’m right back where I started: I think we are insane to couple open-ended entitlement programs to the general government!
Next week, we’ll continue flying high, so we can look down at gridlock!
Rep. Doug Holt, R-Social Circle, can be reached at 404-656-0152 or Doug@DougHolt.org.