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Tilting at Windmills?

As we enter the second quarter, there remain counter-positions fueled by equal measures of optimism and pessimism. These dueling camps continue to joust for public attention, one offering every reason to fear the future, the other countering with rationale emanating from reasonable data that indicates recovery. When studied with some attention to detail, it becomes clear that there are merits to both perspectives, but progress will be elusive if built on a foundation of doubt, gloom and lost confidence. While I see the need to remain calculating and careful, I also see the value in forward thinking.

Tilting at windmills has become a platform for much of the national economic, political and social debate. From a very oblique and diverse Tea Party membership to a Washington establishment mired in self-serving tradition and partisanship, there seems to be more focus on following a negative course than finding one that leads, through obviously rough terrain, to a more promising future. Taking the negative has apparently become the standard, but it is a standard that citizens of every community find unsettling and certainly less than motivational.

A review of available data tells us that unemployment is hovering around 8.8% and that overall GDP should approach 3% for 2011. While this progress is not occurring at the desired pace, the seeds of a steady economic transformation have been sown and could very well blossom into tenable opportunity. What must be considered is that much of the recovering world economy is also struggling and many economies are flat-out broke. Their foundations were never strong and only endured because they were carried by the global economic surge. The U.S. economy is beginning to see broad-based hiring, growing orders, and cautious optimism from the investment community.  As the world’s largest economy, the U.S. has the staying power, experience, creativity and spirit to lead the global recovery. At stake is much more than its economic vitality; this country must also model the art of recovery and the maintenance of reason during a very difficult transformation.

But, having courage means facing both knowns and unknowns. Once the facts are known, the burden of action passes to the knowledge holder; there are no excuses for inaction… especially now, when the financial data are becoming clear. While one may be accused of tilting at windmills, the truth is, the U.S. is facing enormous difficulties. We know that unfunded entitlements (Medicare and Social Security) dwarf public debt and programs by almost 9 to 1. The numbers are staggering; there are obligations of close to $100 trillion in unfunded long-term entitlement payments. The meager diddling that is now being done by Congress is not nearly enough. In fact, it is pathetic when measured against what is at stake for America.

Mary Meeker’s historic (and frightening) slide show, entitled USA, Inc., highlights a Congressional Budget Office alternative case that reflects that, by 2025, U.S. government spending on entitlements and interest payments will consume 100% of government revenues.  This assumes that the Bush tax cuts remain in effect through 2020 except for a modest increase in the high-income tax rate. Given these circumstances, we’re totally upside down.  Unfortunately, as with home or business, when revenues are less than expenditures, as they are now by a considerable margin, we’re already bankrupt…surviving only on credit.

While data can be manipulated, good raw data tells the story. But it is one of situation and circumstance. It is a snapshot of current reality.  It has little to do with the future, unless the present course is maintained. Every state and local government has reached hard decision points. It is now or never. Most economists encourage a multifaceted approach involving some tax increases, elimination of unwise programs, and a complete restructuring of entitlements, pensions, and the healthcare system. The guiding principle must be founded on what is in the best common interest of the country and every community. What is important to keep, eliminate, or redefine? As with home and business, it is not always pleasant, but decisive, thoughtful people can reach wise decisions. We must decide where we want to be in 10 years and chart a path to reach that destination. An arduous path perhaps, but one most of us have traveled before.

My position remains firm: create sensible strategic plans, define a new era of operational efficiency, develop prudent implementation strategies, create fact-driven long-term scenario plans, serve constituents with passion, and remain progressive as you consider emergent new options. Maintaining a bunker mentality will stifle perspectives that lead to long-term community success. Attention to long-term planning, coupled with internal employee and organizational development will pay huge dividends as the recovery continues and there is more clarity about options and opportunities. Take time to heal your community and organization, focus on efficiency and productivity, and establish a collaborative path forward. This is no time to hunker down or polarize. There is much to do and we must do it together.

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. 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. I fully agree, now is the time to risk, with knowledge and pre planning for mid course correction on the action associated with the risk. The worst re action by a politician was Joe Biden’s comment for a moritorium on new nuclear power plants following the Fukishima disaster. Learn from failure and turn the failure into a success. Don’t be afraid of new technology, every thing has a limited life, except, it seams, oil, but thats another story.

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