|
Budget Crisis
Rhetoric
Bankruptcy reveals what bailouts conceal. By Thomas Sowell NationalReview.com  Government-budget crises can be painful, but the political rhetoric accompanying these crises can also be fascinating and revealing. Perhaps the most famous American budget crisis was New York City’s during the 1970s. When Pres. Gerald Ford was unwilling to bail it out, the famous headline in the New York Daily News read, “Ford to City: Drop Dead.” President Ford caved and bailed them out, after all.
The rhetoric worked.
That is why so many
other cities and
states — not to
mention the federal
government — have
continued on with
irresponsible
spending, and are
now facing new
budget crises, with
no end in sight.
What would have
happened if
President Ford had
stuck to his guns
and not set the
dangerous precedent
of bailing out local
irresponsibility
with the taxpayers’
money?
New York would have
gone bankrupt. But
millions of
individuals and
organizations go
bankrupt without
dropping dead.
Bankruptcy conveys
the plain facts that
political rhetoric
tries to conceal. It
tells people who
depended on the
bankrupt government
that they no longer
can. It tells the
voters who elected
that bankrupt
government, with its
big-spending
promises, that they
made a bad mistake
that they would be
wise to avoid making
again in the future.
Legally, bankruptcy
wipes out
commitments made to
public-sector
unions, whose
extravagant pay and
pension contracts
are bleeding
municipal and state
governments dry.
Is putting an end to
political
irresponsibility and
legalized union
racketeering
dropping dead?
Politics being what
it is, we are sure
to hear all sorts of
doomsday rhetoric at
the thought of
cutbacks in
government spending.
The poor will be
starving in the
streets, to hear
politicians and the
media tell it.
But the amount of
money it would take
to keep the poor
from starving in the
streets is chump
change compared to
how much it would
take to keep on
feeding unions,
subsidized
businesses, and
other special
interests who are
robbing the
taxpayers blind.
Letting armies of
government employees
retire in their
fifties, to live for
decades on pensions
larger than the
income they made
while working, costs
a lot more than
keeping the poor
from starving in the
streets.
Pouring the
taxpayers’ money
down a thousand
bottomless pits of
public and private
boondoggles costs a
lot more than
keeping the poor
from starving in the
streets.
Bankruptcy says: “We
just don’t have the
money.” End of
discussion. Bailouts
say: “Give the
taxpayers a little
rhetoric, and a
little smoke and
mirrors with the
bookkeeping, and we
can keep the party
rolling.”
One of the political
games that is played
during a budget
crisis is to cut
back on essential
services like police
departments and fire
departments, in
order to blackmail
the public into
accepting higher tax
rates. Often, a lot
more money could be
saved by getting rid
of runaway pension
contracts with
public-sector
unions.
Bankruptcy can do
that. Bailouts
cannot.
What the public
needs are current
policemen and
current firemen, not
retired policemen
and retired firemen,
much less
bureaucrats retired
on inflated
pensions.
The political
temptation to create
extravagant pensions
is always there, not
only at state and
local levels, or at
the federal level,
but in countries
around the world.
Why? Because
pensions are
benefits that can be
promised for the
future, without
raising the money to
pay for them.
Politicians get the
votes of those to
whom pensions are
promised, without
losing the votes of
taxpayers — and they
leave it up to
future government
officials to figure
out what to do when
the money is just
not there. It is a
sure-fire guarantee
of political
irresponsibility.
All of this works
politically only so
long as the voting
public accepts
budget crisis
rhetoric at face
value, without
bothering to stop
and think about what
it means and
implies.
–
Thomas
Sowell
is a senior fellow
at the
Hoover
Institution.
© 2011 Creators
Syndicate, Inc. |