09 May 2010

Political Class, Media Fail To Understand U.S. Is Broke

From Reason.com: We Are Out of Money
American governance won’t begin to inch forward until the political class faces basic facts.

In March the federal government created the most expensive new entitlement in four decades, even as the bond rating company Moody’s Investors Service warned that debt levels could soon precipitate a downgrade in U.S. Treasury bonds. The main opposition party fought the bill by decrying “cuts” to Medicare, and it has kept itself at arm’s length from one of the few politicians talking seriously about long-term reform.

Today may be terrible, but tomorrow is going to be much worse, at least as measured by such metrics as deficits, debt, and entitlement spending.

Surveying the fiscal wreckage at the end of 2009, BusinessWeek’s Joe Mysak found that the 50 states had cut their combined payrolls that year by a minuscule 0.25 percent. Mysak’s conclusion: “Politicians everywhere are talking about layoffs, of course. They have been talking about eliminating jobs, often in threatening tones, since at least January. As the numbers show, for most, it’s just talk.”

Such talk has created a feedback loop in the media, where budget cut horror stories—which never mention how much state and local government spending skyrocketed in the years before the recession—mix seamlessly with editorial-page calls to spend still more money we don’t have on government jobs we can’t afford.

As long as there’s still one greater fool left willing to chase diminishing returns with more cash, politicians can keep putting off the day of reckoning. If they’re lucky, they’ll be long out of office when the gong strikes midnight. Unfortunately for most of us, we’ll still be here.

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