Thanks to strong financial management, Utah is one of a very few states that enjoys a Triple A bond rating. Utah balances its budget, deals forthrightly and quickly with fiscal challenges (such as projected shortfalls in retirement funds) and manages debt wisely.
Compared to Utah, the federal government is a financial basket case. Compare how the state and the feds handle debt: Utah borrows only for large capital projects, such as highways and buildings, that have lasting or increasing value, which makes them an investment as much as an expenditure. The state doesn’t borrow for on-going operations in base budgets and doesn’t borrow more than it can readily repay in a relatively short pay-off period.
By contrast, the federal borrows 40 cents for every dollar it spends. It has long since abandoned any pretense of borrowing just for capital projects. It borrows for the daily needs of ongoing operations of federal agencies and it almost NEVER repays principal, just interest. The total debt just gets larger and larger and the interest payments, alone (never mind the principal), take an ever-increasing share of the federal budget.
While the state’s long-term financial obligations are well under control, the federal government’s long-term obligations, such as Social Security, Medicaid, Medicare are deep under water and the feds have no plan or direction how to make them solvent.
With the Congress and the administration apparently unable to control themselves and reduce expenditures to equal income, President Obama wants to appoint a special commission to recommend how to deal with the looming entitlements disaster. "Help! We can't stop spending," he is saying.
If Utah state government was a family, it would be a frugal, middle-class family with a modest home and a mortgage being paid off on schedule, no credit card debt, and money being invested in a retirement plan.
If the federal government was a family, it would be a family hurtling toward a financial train wreck, a family paying only interest on a gigantic mortgage on a monster home it can’t afford, borrowing not just for a home and cars, but racking up credit card debt for food, utilities and everyday expenditures. It would be a highly dysfunctional family where members can’t agree on a course to control spending, so debt piles up and bankruptcy looms.
Given the state of these two families, which family should we look to to deal with the problems of the neighborhood? Should we expect the dysfunctional, bankrupt family to resolve the challenges facing the neighborhood? Wouldn’t it make more sense to allow the the stable, financially secure family to tackle neighborhood problems?
The hard facts of life are that it no longer makes sense to depend on the federal government to deal with the nation’s domestic issues. States are much better situated and prepared to deal with education, health care, transportation, and a lot of other areas of government dominated far too much by a dysfunctional national government.
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LaVarr,
I agree wholeheartedly with your conclusion that the federal government has tragically proven itself incapable of prudence in any respect. However, the "frugal family" in your example presently relies on the "reckless family" for nearly half of its annual budget. The need to become independent of the federal government "hurtling toward a financial train wreck" has never been greater or more urgent. This will require the type of sacrifice from all of us that is our founding heritage as Utahans. This will require personal charity for which Utah is known. This will require the hard work and sacrifice from all of us as exemplified by those first Utahans who turned a desert that no one else wanted into a fruitful land. This will require personal and public commitments to education as a top priority like those who came here with nothing but in their poverty built schools and universities as the best investment for their own future. This will require courage of each one of us lending courage to our representatives to make simple, but tremendously difficult choices to secure the blessings of liberty for our posterity.
“It is natural for man to indulge in the illusions of hope. We are apt to shut our eyes against a painful truth, and listen to the song of that siren till she transforms us into beasts... For my part, whatever anguish of spirit it may cost, I am willing to know the whole truth, to know the worst, and to provide for it.” (Patrick Henry)
Thank you for your continued efforts to teach the imperative of a return to true federalism.
Ken Ivory