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Government Debt Addiction Must End

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Barack Obama, US president, has been urging Congress to approve more stimulus money to help fiscally strapped states, such as Ohio, avoid layoffs of potentially hundreds of thousands of state and local government employees.

Obama wants at least $24 billion for state governments.

Approval of such state aid will mark the second time in the current recession that states have been bailed out of their plight with federal cash, and the second time they would get a pass on making the tough decisions to balance their budgets.

Many states are in trouble, with 11 projecting major budget gaps for the next several years.

California is the poster child, of course, with a deficit of about $19 billion this year, and Ohio is in a dire situation, too, as it faces an estimated $8 billion budget hole in its budget for 2012-13.

State leaders have been looking for an out, and many see the federal government as a sugar daddy, a way to prop up state and local governments that are living way beyond their means.

All but one of the states works under a constitutional mandate to balance their budgets. So, without a federal bailout, states would have to raise taxes or cut spending.

The pain would be sharp, but is unavoidable. The federal government is $13 trillion in the red, and any money it gives to the states is borrowed and adds to the annual deficits and the national debt. This is unsustainable.

So states eventually will have to face these hard choices. The longer they dodge them, the worse the day of reckoning will be.

Federal bailouts feed the states’ addiction to fiscal painkillers. But feeding an addiction simply makes it worse and harder to break when the drug runs out.

The federal budget deficit for 2010 is projected to be $1.3 trillion. The shortfall is the second-largest in history after last year’s $1.4 trillion deficit.

The Congressional Budget Office predicts deficits of more than $1 trillion every year for a decade.

As this page went to press, Congress was balking at another bailout. That’s a sign that some lawmakers, at last, are alarmed at the disastrous path the federal and state governments are on.

That’s good. Alarm is precisely what every member of Congress should be feeling.– Columbus Dispatch



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