HUDSON: NUMBERS HIT HOME
‘Going big’ could mean a big budget mess
Rarely do the media, nor do our politicians in Washington, present financial data in a format that actually communicates the jaw-dropping reality of our federal budget mess. It’s proven easier to talk about “going big,” the euphemism du jour for attempting to legislate a fix which reduces budget deficits to zero within fifteen or twenty years. Easier still, was pointing fingers during the Congressional Super Committee’s recent failure to identify $1.2 trillion in spending cuts over the next dozen years. Lets chart the current fiscal position of every American before proceeding.
Contemplating your own financial stake helps concentrate the mind. It also shines a spotlight on the appalling failure of Congress to get serious. They expect to overspend their revenues next year by $17,000 per citizen and still couldn’t agree, during four months of debate, on a paltry $300 in annual revenues or reduced expenditures over the next decade. This would take the average focus group less than thirty minutes to successfully accomplish. But, of course, actual taxpayers are required to balance their personal budgets. They know how to make value judgments because they find they must do so each and every day.
You don’t need a crystal ball, or a degree in economics, to recognize that the size of the federal government will soon shrink — dramatically. It seems almost as likely that at least some taxes will rise. The only outstanding question is whether these changes will be embraced and implemented as a matter of economic policy, or imposed on us, as a consequence of market failure and a disorderly national bankruptcy. As the Bowles-Simpson Commission’s recommendations make clear, we will require ever deeper and escalating federal budget cuts, each and every year for the next decade or longer, if we plan to try and ‘go big.’
All of this constitutes a huge threat to the Colorado economy — a threat at least as menacing as the “Silver Panic” of 1893. While we are not as reliant on federal spending as some of our neighbors, there is little doubt that cutbacks will act to drag us back into recession. The federal presence in Colorado is extensive and pervasive. Congress is our largest land manager and Washington dollars help prop up local spending in communities across the state — not to mention the military bases, federal agencies, and university based research programs that pump additional dollars into our economy. If there was ever a predictable crisis that demanded special attention from the Legislature, this may be it.
The Governor got a head start on this problem with his ‘ground up’ development of regional economic development plans. The next legislative session should be focused on implementing these plans, consolidating existing economic programs and the creation of specialized tax incentives for targeted business sectors. This is not the time for laissez faire governance. Establishing Colorado’s bona fides as a pro-active haven for private sector business should be established before we find ourselves in a cutthroat competition with our neighbors. It’s always easier to remain in the lead than to try and play catch up. If the Governor doesn’t get what he wants in the regular session because of election year posturing, he should make it clear he will jerk legislators back for a special session until he acquires the tools he needs to create good jobs. This may sound like corporate welfare on steroids, but we’ve been playing that game for decades and the next few years will be no time for half-hearted efforts.
*Statistics provided by the Community Economics Lab
Miller Hudson is a contributing columnist for The Colorado Statesman.