The signs are all around us. Even as Barack Obama and the Democrats lower their heads and prepare to bulldoze a huge new entitlement through Congress, the results of profligate government spending are everywhere apparent. It requires a prodigious degree of ideological blindness to miss this.
In Greece, decades of lavish spending on public employees and social programs have led to national bankruptcy. Greece’s budget deficit last year was 12.7 percent of GDP. Want to know what an economic dead end looks like? It looks like this: A socialist government is forced to try to adopt austerity measures on an infantilized citizenry gone soft and dependent. Public employees respond with strikes and violence. “Tax collectors began a two-day walkout,” reports the Sydney Morning Herald, “court employees launched a week-long series of work stoppages and garbage collectors also mobilized against state spending cuts that are meant to save 4.8 billion euros (6.5 billion U.S. dollars).” These smaller walkouts fall between last week’s general strike and the general strike called for Thursday.
In related news, thousands of students and faculty took to the streets to protest cutbacks and tuition increases at the lavishly funded University of California at Berkeley. Arrests were made after about 200 students rioted, vandalizing a university building and lighting trash cans on fire. An ethnic-studies professor at San Francisco State lamented the violence, explaining that it “casts a shadow on the majority of our students who are working constructively toward budget justice.”
No doubt many New Jerseyans also think of themselves as crusaders for justice. But last month, newly-elected governor Chris Christie delivered a frank assessment of the need for budget continence: “There’s no time left. We have no room left to borrow. We have no room left to tax.” New Jersey, he warned, is “on the verge of bankruptcy.” New Jersey faces a $68.9 billion long-term liability for retiree health care and other benefits, one of the steepest obligations of any state, but has not set aside the funds to cover it. The recession played a role in bringing New Jersey’s woes to a head. But part of competent government is planning for contingencies. Consider what even the liberal Newark Star-Ledger acknowledged:
We have the highest-paid police officers in the country, and they can retire after 25 years at 65 percent of their highest salary. We have the nation’s highest-paid firefighters, too. Salaries for our teachers are always at the top of the nation, or close to it. And most pay nothing for red-carpet health benefits for life.
This year, in the middle of a punishing recession — when more than 10 percent of New Jerseyans are out of work, when others are having their pay and hours cut, when many are losing homes to foreclosure — teachers’ average base salaries rose by nearly 5 percent, double the rate of inflation.
Unlike most private-sector employees, New Jersey police officers can cash in on unused sick days. A retiring New Brunswick officer received $376,234 for unused sick days, on top of his annual $115,000 pension. It’s a common pattern. New Jersey has run itself into a ditch, led by liberal Democratic officeholders and their public-union backers and beneficiaries.
New Jersey is one of the worst offenders (along with California, Florida, Michigan, and a few more), but nearly all states are facing a shortfall. The Pew Center on the States found a $1 trillion gap at the end of fiscal year 2008 between the $2.35 trillion states had set aside to pay for employees’ retirement benefits and the $3.35 trillion price tag of those promises. “While the economic crisis and drop in investments helped create it,” explained Susan Urahn, the study’s director, “the trillion-dollar gap is primarily the result of states’ inability to save for the future and manage the costs of their public-sector retirement benefits.”
At the federal level, the government has undertaken promises in the form of Social Security and Medicare that amount to $107 trillion in 2009 dollars. And while the future obligations under Medicare get plenty of ink, the costs of the Medicaid program (which, due to elastic eligibility standards, winds up providing nursing-home care for many middle-class elderly people in addition to the poor) may eventually dwarf the cost of its sister programs.
Last week, the Congressional Budget Office projected that if President Obama’s budget is adopted (without the health-care bill), the national debt will grow by $9.7 trillion over the next decade. And what we need, at this critical juncture, the Obama administration insists, is a huge new entitlement.
Beware of Democrats bearing Greek-like gifts.
— Mona Charen is a nationally syndicated columnist. © 2010 Creators Syndicate, Inc.