A Rich Lesson in Government Finances from Gregg

The article’s a few days old, but one comment from writer Katherine Gregg yields too rich of a lesson for Governor Carcieri not to highlight:

How did we get to this point? Despite orders to cut spending, some state administrators simply couldn’t bring themselves to do it. And state lawmakers seemed content to accept the Carcieri administration’s promise of millions in unspecified cuts, rather than demand the kinds of emergency cutbacks in state-subsidized Medicaid programs, municipal aid, layoffs and government shutdown days that might have worked.

Yes, anybody who’s followed the headlines for the past nine or so months can attest that every difficult decision made in the course of trimming our overgrown government brings indignation and media coverage painting the pruners as perpetrators, and here we are with a post facto instruction that such steps “might have worked.” And no, going in the other direction — making the tough decisions in order to save the budget — probably won’t produce post facto statements about doing what we had to do.
The lesson: hack away, because if one pays attention to the vested interests, the invested politicians, and the local media, becoming the fall guy for calamity is the likely result. The people of the state understand, though, and strong action will win them over.

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Monique
Editor
13 years ago

“every difficult decision made in the course of trimming our overgrown government brings indignation and media coverage painting the pruners as perpetrators”
I appreciate and agree with Katherine Gregg’s point – that serious steps must be taken to get the budget under control.
But this task is made more difficult by some of her collegues at the ProJo and other media who, when these budget measures are announced or implemented, choose to “report” on them by writing articles built around sob stories instead of facts and figures.

George Elbow
George Elbow
13 years ago

Hack away is exactly right.
When in the hell is the Governor going to start swinging the axe? Not soon enough.
He is running out of time and he will unfortunately be tarred with the blame for the train wreck that is coming.
By the way, in case nobody noticed, the markets have taken a bit of a drop recently.
In fact, the Dow is down 20% year-to-date and is below the level it was at back in 1999 / 2000. The S&P 500 is back to essentially the same level it was 5+ years ago (Dec 2003).
30 year T-bills are yielding a piddling 4%.
So, perhaps it is time for Andrew to dust off his famous Pension Simulator and show us again how the Walshian Assumptions work.
And perhaps this time he can demonstrate what an unsustainable deal we have given to our Public Employees.
Indeed, they could care less about the 20% decline in the market. After all, they still get their GUARANTEED pension payment of 75% or more of their highest 5 years of salary, which grows by 3% per year, despite having ONLY contributed a mere 9% of their salaries.
Me thinks that this may be the year that people wake the F up and stop drinking the Bob Walsh Cool-Aid, ‘cuz the bill is finally coming due.
“Compounding interest” my ass. The only thing that is going to be compounding is our Tax bill.
Sadly, I suppose the Gov will continue to “study” the issue of Pension Reform, and perhaps even appoint a Commission full of beneficiaries to come up with “recommendations”. Oh that’s right, he already did that.

Anthony
Anthony
13 years ago

>>seemed content to accept the Carcieri administration’s promise of millions in unspecified cuts rather than demand the kinds of emergency cutbacks in…layoffs and government shutdown days that might have worked
HELLO! It was Carcieri that pushed the need for a reduction in state workers and shutdown days!
As was pointed out, when this discussion was happening, all the Projo reporters could write about how spending cuts were hurting people.
There was little effort to discuss how state government needed to balance the financial stability of the state versus spending on state progams. No, it was all about “humanizing” the issue by showing the effects of spending on a select few.
Now hundreds of thousands of people will be affected.
Now we’ve got unemployment running at 8.5% (second only to MI which can at least blame to price of gas for a reduction in auto production).
Now we’ve got an even larger budget shortfall expected in the near future.
I don’t absolve Carcieri of all blame in this situation. The Medicaid waiver application was more speculative than he and the General Assembly thought. But of all the players, Carcieri has done more to fix the current situation than anyone.

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