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Sowing and Reaping

Discussions about earmarks have taken an interesting turn this past week as newly, and some previously, elected members of Congress have indicated support for ending this practice that has cost taxpayers $15.9 billion this year. While this is only 1% of a $3.7 trillion budget, it represents funds that could be better allocated and less prone to cries of favoritism. The best thing about the recent earmark conversation is that it may portend greater opportunity for collaboration on deficit reduction.

However, greater depth is needed if there is to be realistic planning and preparation for a costly future – one with huge and growing costs associated with infrastructure repairs, Social Security and Medicare deficits, iconic subsidies, and an enormous defense budget that in the future may prove to be overly bloated and misallocated. Bottom line, virtually all sensible pundits, economists and academics have continued to advocate a movement toward rational thought relative to future needs and the value of righting the financial ship. As with any business or family, a combination of spending less and generating more are the twin pillars of financial planning. These, along with other foundational elements characterized by prudent choices, comfort with less, prioritization, and a commitment to live within reduced means, seem to be genuine guideposts to economic sustainability.

To prepare for the future, where huge costs are unavoidable, America’s leaders must focus less on politics and election year rhetoric and more on simple arithmetic. As some have said (loudly), you can’t spend $3 and take in $2 for very long before you are bankrupt, and, even if you borrow (if you can find the cash), after a while, no one will lend to you. At that point, it caves. And, when it caves, it will cave fast and hard.

So…we are reasonably intelligent people. Why don’t we decide what services are required and at what level, establish priorities that have the greatest value for the most people, and determine what they will cost? Government budgets must be established to preserve the highest level of common good for a community. How is that defined? We live in a country that has experienced 60 golden years when compared to Europe, Africa, South America, and Indonesia. We have had a wonderful run and it can continue. But it is in jeopardy unless we rein in spending and establish the means of funding the most essential programs and services.

The co-chairs (Alan Simpson and Erskine Bowles) of the bi-partisan presidential commission to review the federal deficit outlined a proposal to reduce the deficit by nearly $4 trillion by 2020. This would be accomplished by eliminating $1.1 trillion in sacred tax breaks, adding 15 cents per gallon to the gasoline tax, reducing the federal workforce by 10 percent, reducing the number of overseas military bases and slashing farm subsidies by $3 billion per year. In addition, they suggested raising the age for full Social Security benefits to 68 by 2050 and 69 by 2075.

Response has been heated and negative. While their recommendations represent a ‘stake in the ground’ for those who are serious about deficit reduction, polarity and resistance have remained profound. Post-campaign rhetoric about cutting the federal budget has remained hot and heavy and public sentiment supports bold action to both reduce and preserve. Again, it is simple math. You can’t have it both ways. Major cuts are required and higher taxes (of some sort) are essential. The U.S. cannot survive with its current spending level. It either seriously reduces spending among historically sacred entitlements and critical programs or it increases revenue. Due to the level of pre-existing interest payments, entrenched public programs, entitlements and defense, it would cause great socio-economic harm to cut too much too fast. But, doing nothing is a mistake. The reluctance to act is primarily why we are in this mess.

State and local governments are precluded from running deficits. Budget and program reductions are therefore being annualized according to economic fluctuations and local requirements. This bodes well for much of the country, even though it continues to be difficult. As society and the economy transform, each is finding a new center that is more sensible and sustainable. State and local government will arrive at a solution long before the federal government and could very well illuminate the path forward. There is not a single applicable equation but it is clear that the way forward requires collaboration, a can-do spirit and a willingness to sacrifice during the transformation. The progress I see in state and local government reflects these necessary attributes and many cities and counties are beginning to recharge. The real question is whether members of Congress will follow the lead of state and local leaders and quit wasting time before it is too late.

With over three decades working in and with federal, state and local government, John Luthy understands public agencies.  Known for his real world, straight talking style, he is a leading futurist specializing in city, county, state, and federal long-range thinking and planning. Among other articles and essays, John is the author of Operations Planning: A Guide for Public Officials and Managers in Troubled Times, and The Strategic Planning Guide, both published by the International City/ County Management Association (ICMA). His new book, Planning the Future – A Guide to Strategic Thinking and Planning for Elected Officials, Public Administrators and Community Leaders, was released in October 2010. An innovative and dynamic presenter, John is frequently asked to speak and consult on how to prepare public organizations and communities for emerging challenges (public futures at http://www.futurescorp.com).

One Response

  1. There’s nothing really complicated here. As stated, the math is simple; one cannot prosper while spending more than one has. Governments at every level and citizens as a whole have to look at life differently: do more with less, make do with what we have, focus on the necessities not superficial material possessions. Why not loudly publicize the real needs facing our country and make a united effort politically and among countrymen(women) to improve our nation as a whole. It’s time to focus on the benefits of all rather than the wants of self.

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