State Rep. Mary Lou Dickerson, D-36th District, says that wrestling with the budget in the past legislative session was the most difficult task she has experienced in Olympia. Imagine the anguish if total spending was actually cut and not increased.
Olympia, like the federal government, acts as if government must continually expand at all costs. An insatiable appetite for money exists both here and on the Potomac. The debt grows exponentially.
The United States is now at a point that all federal taxes collected are sufficient to cover only Social Security, Medicare and Medicaid. Money to pay for all other federal activities such as housing, education, defense, Amtrak, PBS and law enforcement has to be borrowed. Gov. Gregoire is worried that the Feds may not borrow enough from the Chinese to send her the more than $400 million needed to hide her refusal to trim the budget here.
The co-chairs of President Obama's Debt & Deficit Commission, former Republican Senator Alan Simpson and Erskine Bowles, President Clinton's former chief of staff, recently spoke to the governors. They said the continuing accumulation of debt is a cancer "that will destroy the country from within" unless changed. Bowles says neither growth nor taxes by themselves will help. They call for "tough action" including spending cuts. It is clear that the man who appointed them will ignore their advice.
At the recent G-20 Summit in Toronto, the president, as he had in 2008, asked other leaders to hold hands with him and dive off the cliff into bottomless debt. They refused, instead closing the G-20 Summit with a call for reduction in government debt worldwide. The president declared himself a success and returned home to continue growing the debt in order to expand government.
He might have paid closer attention to Canada while he was there. Our northern neighbor is another of those that did not follow the president's prescription for stimulus spending. Canada's unemployment rate is 7.9 percent and has been dropping for the past year. Private sector unemployment in the U.S. is higher and significantly unchanged since last year. Most of the European countries are also doing better and seeing recovery in their economies and not just in the news releases.
Recent headlines proclaimed that unemployment dropped in June. True, in May it was 9.7 percent versus 9.5 in June. Unfortunately the reason for the decline is the growing number of people who had stopped looking for work or have exhausted unemployment benefits, two groups not included in the unemployment statistics. When they are included, nationwide unemployment is in the neighborhood of 17 percent.
Government debt is sucking money out of the system that would otherwise be available for business expansion and the real creation of jobs and wealth. It will get worse with huge tax increases already in the pipeline for January 2011. Its policies and anti-business sentiment, the strongest in decades, compound the problem by creating an uncertain climate. Consumer confidence has crashed.
Until recently the Business Roundtable was supported by the president, but now Ivan Seidenberg, head of the Roundtable and Verizon CEO says, "By reaching into virtually every sector of economic life, government is injecting uncertainty into the marketplace and making it harder to raise new capital and create new businesses." He notes that even business with large cash reserves are not spending.
Recovery is not around the corner. Rep. Dickerson will have to make real cuts in state spending the next time around. Depending on the November elections the same may be happening in the other Washington too.[[In-content Ad]]
