When you have an 800 pound gorilla in a room, a shotgun may not be enough to solve the problem, and in fact could exacerbate it if he gets mad at you. There are other weapons you can use that are more effective, but the solution is a bit more drastic. An automatic machine gun with a large supply of rounds would be enough to eliminate the threat. But now, assume that in addition to the gorilla, there is a large swarm of killer bees in the room with you also. The machine gun is useless against this threat, and another weapon must be found.
This is analogous to the problem Americans face today. Our states and the nation are facing unprecedented financial difficulties. But even though the threats are similar and the problems at the state and national levels are related, the weapons we must use to kill off these threats must be different.
For the most part, we are attacking both problems around the edges and have not been effective in executing an effective frontal attack on these threats. At both the national and state levels, special interests, lobbyists, and timid politicians have so far been unwilling to make the tough, effective decisions that will rescue us from this financial abyss.
At the federal level, the stimulus package that was passed at the beginning of the Obama administration was a good start, but also was insufficient. The size of the package was enough to stop the free fall, but it has not yet turned the economy around. Because of the objections that Republicans raise at any suggestion to increase the number of “government jobs”, much of the stimulus money was funneled through for-profit corporations. And to placate the uncompromising Republicans, tax cuts that would elate Ronald Reagan were included in the bill, unnecessarily increasing the federal deficit.
Not surprisingly, the same people who promote these deficit-inducing tax cuts rail against increasing the deficit when the benefit is going to the lower and middle classes instead of their own pockets. We do need a second stimulus package to help the poor and middle class (including the extension of unemployment benefits which is being vigorously opposed by the compassionate callous conservatives.) As Nobel Prize winning economist Paul Krugman points out, an increase in government spending is the only way to avoid a long and painful Depression.
But given that an effective stimulus package will increase the deficit, it does not mean that we have a blank check. We need to look at existing spending – nothing other than the Social Security and Medicare mandates are sacrosanct – and ensure that new spending goes directly to job creation and economic growth. Ronald Reagan and George W Bush have amply demonstrated that tax cuts don’t solve the problem, so another approach is needed.
This means tough choices must be made to rescue the country, and bold action must be taken. Up to now, the Defense budget has been immune to fiscal restraint and in fact continues to grow without critical evaluation of the overall effect on the economy. Parts of the Defense budget are stimulative and, in fact, do create jobs, even if they are jobs of last resort for some workers who would otherwise be unemployed. But the 800 pound gorilla these days is the oil war in the Middle East. Not only don’t we have a viable exit strategy, but the justification for being in these wars is dubious. The threat from Al Qaida in Afghanistan is minimal, and the war in Iraq is nonsensical. The President should accelerate bringing those troops home now, and provide them with a soft landing by creating jobs here in the United States where the veterans can contribute to rebuilding our crumbling infrastructure and regain our technological leadership. Never again should the budget for wars be subject to tricky accounting that hides their financial impact from the American taxpayer. Ending these wars is the most effective way to reduce our deficit – why are the deficit hawks in Congress ignoring this obvious fact?
But that’s just the beginning. We need to critically examine our military procurement. The Obama administration made a good start with the F-22, by cancelling a program that would build an aircraft designed to fight a non-existent Soviet Union. A critical examination of the Defense budget is bound to reveal more programs that could be cancelled or postponed without seriously impacting national security.
We should also look at our deployment of troops overseas. Since the end of World War II, we have had tens of thousands of troops in Germany and throughout Europe and the rest of the world. Now that other global economies are becoming as strong as or stronger than our own, it’s time for those countries to assume a bigger share of the burden of national security. Yes, there’s a viable threat in Korea, and we should carefully consider our treaty obligations there. Similarly, we should use our military and economic assets to ensure that Israel is allowed to thrive amidst her hostile neighbors. But elsewhere in the world we need to do an intelligent trade-off between our economic woes at home and insisting on security self-sufficiency abroad. Our security as a nation is not just a factor of our military power, but equally of our economic strength.
So to meet these challenges at the federal level, we must have more stimulus in the form of direct short-term government spending, be wary of tax cuts, and make a holistic and critical examination of existing programs including Defense. While this is a good roadmap for solving the federal budget problems, it is obviously not relevant to fixing similar problems here in the State of New Jersey.
For starters, unlike the federal government, the state cannot sustain deficit spending. Yet, projections show the state deficit, which is over $2 billion this fiscal year, to be increasing dramatically. While next year’s budget, which must be approved by June 30, is starting to gel, whether or not there is an impasse resulting in a shutdown of state government, it is clear that Governor Christie’s approach is already a failure. Constitutionally-mandated tax caps and Bush/Reagan tax cuts, which are being pushed by the Governor, are recipes for disaster as demonstrated in California, Massachusetts, and elsewhere. And Christie’s budget includes tax increases in the form of fees and increased burden on municipalities while cutting taxes for millionaires. While the federal government has a big opportunity to save money by eliminating unnecessary wars, is there unnecessary spending in the state that provides an equally rich target? Certainly.
New Jersey has twenty one counties. But it has over six hundred school districts and almost as many independent municipalities. While this problem is generally recognized, as with the current federal approach, tiny solutions around the edges are being implemented instead of a full frontal assault. While it is in the self-interest of the thousands of elected officials throughout the state to maintain the status quo, it is in the interest of taxpayers to aggressively consolidate functions such as emergency services and school districts into one per county. Providing services at the county level eliminates duplication of highly paid management, and invokes economies of scale in procurement, and standardization of procedures, and avoids overlaps. Similarly, consolidating the state into 21 school districts provides the opportunity for significant savings to the taxpayers. If Emperor Christie really wants to solve the state’s financial problems, he should promote consolidation as vigorously as he attacks the middle class. And by the way, bring back the millionaire’s tax so that those 16,000 New Jerseyans participate in the “shared sacrifice” that the rest of us 8.7 million citizens are enduring.
So while the problems on the state and federal levels seem similar, the solutions are unique. It will take courage on the part of Barack Obama and Chris Christie to make these disruptive but necessary changes. To date, neither has shown he possesses that courage. The President has given undue deference and influence to the extremists in the Republican party and has received nothing in return. The Governor is simply parroting the Reagan/Bush economic policies that got us into this situation in the first place. So far, we are attacking both the gorilla and killer bees with water pistols.
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