A friend sent me an email which asked why the federal government is always running a deficit if both Democrats and Republicans are opposed to deficits? The answer is the Founding Fathers failed to include a requirement in the Constitution that the federal budget be balanced. Though there have been attempts to rectify this oversight by amending the Constitution, it’s never gotten very far because their rhetoric to the contrary, most politicians find deficit spending quite useful in securing and advancing their careers.
Deficits occur when revenues do not match expenditures. This can be remedied either by raising revenues or reducing expenditures. Neither option is feasible for most politicians, most of whom have built their careers on promising their constituents an ever growing number of increasingly expensive government services while also promising not to present them with the bill in the form of higher taxes.
As a result, the deficit balloons and doesn’t stop despite the smoke and mirrors employed in Washington to cover it up. Said smoke and mirrors involve deceptive accounting procedures that would get an accountant in the private sector thrown in jail. More ominously, it involves two of the most deadly wounds government can inflict on the economy: inflating the currency by running the printing presses and/or massive borrowing.
This works for awhile and everybody who doesn’t look at the world through rose-colored glasses is happy. The fiscally honest — a subgroup of humanity largely absent from Washington — aren’t happy because they know economic disaster and the inevitable day of reckoning cannot be put off indefinitely. They know that the longer it is put off the worse it will be.
The only way to prevent such a disaster is to outlaw deficit spending and require the politicians to produce a balanced budget. In Washington, deficit spending is not against the law so the politicians are free to be as fiscally dishonest as their individual and collective political and ideological agendas dictate.
The rule of law still exists in South Carolina, however, so the politicians must produce a balanced budget every year. This has not, I’m sorry to say, prevented them from being as irresponsible as their federal counterparts, but it does bring their irresponsibility to light by forcing them to cut the budget if there’s a revenue shortfall.
That brings us to the real source of the controversy between Gov. Mark Sanford and his opponents. Sanford wants to use part of the state’s allotment of federal stimulus money to reduce the state debt while his opponents want to use it to balance the budget and avoid more spending cuts. His opponents have accused Sanford of playing politics and they’re probably right, but if he is you can be certain they are too.
The average politician promises his constituents that he’ll give them more government largess while handing the bill off to someone else. That’s what Sanford’s opponents are basically doing — promising to provide the various constituencies with the additional spending they’re demanding now while handing off the bill to a future generation. They’re being typical politicians, pandering to the short-term interests of today’s voters in order to reassure their reelection despite the damage it will cause in the long run.
While no doubt just as politically motivated, Sanford’s position is the more fiscally responsible. Debt is going to crush us if hyperinflation doesn’t. Something must be done about it and now before we reach the point of no return. South Carolina is as good a place as anywhere to start this country on to the road to fiscal sanity, even if we have to use money Washington borrowed from China.
This brings me back to my original question: What will Sanford’s opponents do next year if the budget shortfalls continue? Beg Washington for another bailout? How long do they propose to continue asking Washington to balance the state budget? Until we reach the point where Timothy Geithner is regulating the salaries of public officials in this state and Barack Obama is forcing legislators who don’t meet with his approval to resign?