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Thursday, May 24, 2012
Looting Solves Nothing

In a little more than two weeks, the County Board of Supervisors will be conducting their annual budget hearings. Unfortunately, although California State law requires a balanced budget be approved, it does not require that all factors be considered in the process of approval. Such is the case for our State and Federal government as well.

 

In households and offices across America, families and business managers have to pay their bills and budget accordingly.  In order to survive, responsible planning requires a long term outlook that takes into account all known assets and liabilities. 

 

Families know they need to start early if they plan to send their kids to college, pay for weddings and plan for their retirement years.  The bills associated with these fundamentals of life are more often than not, the most daunting challenges to successful financial planning.  Rent and mortgage expenses, medical bills, car payments, insurance, food and clothing have to all be paid year after year and balancing all these obligations is no easy task.  But it must be done.

 

Business owners always have to keep in mind the fact that employee costs, taxes and regulations are always going to cost more.  Moreover, replacing capital equipment in a timely manner is incredibly expensive and has to be budgeted for long in advance.  Staying one foot ahead of the competition, especially competition from foreign markets makes this a very difficult task.  For instance, our local farmers must compete with growers in foreign lands who pay less per day than our growers pay per hour in labor costs.

 

I said all that to say this.  Government doesn't come anywhere close to managing their budgets in a prudent and responsible manner.  The US Senate hasn't even approved a budget for the past couple of years!  Government at every level has no plan whatsoever to cover long range deficits and debt payments.  They have no plan whatsoever to cover their pension liabilities.  They have no plan to catch up on capital maintenance and future infrastructure expansion requirements. 

 

Locally, Santa Barbara County has well over $500 million in road maintenance and building projects deferrals.  They owe another $500 million in pension liabilities.  That is a billion dollars in unfunded liabilities, debt and deficits for a county of only 425,000 people!

 

The State of California is in the hole to the tune of some $30 billion not counting pension liabilities that could easily amount to well over $200 billion.  You have heard Governor Brown speak of a debt in the amount of $17 billion, but that figure is only accurate if voters approve the November tax ballot initiatives!  And, it does not include the $10 billion we owe the Federal Government to pay back what we borrowed to issue State unemployment checks!   And, Brown  thinks we have $100 billion to pay for high speed rail?

 

Finally, did you know that within the next 20 years, the Federal government will be so overwhelmed by the debts attributable to Medicare, Social Security and Obama Care plus interest we owe to China for borrowing trillions of dollars, that we won't have any money left for such things as our military program and public infrastructure?

                                               

For those of you who say tax the rich, do the math!  We could take all the assets of the so called 1% and still not have enough to pay these bills.  The fact that the wealthy are already paying more than half of all taxes should make you realize that this is not a debate about fairness; we as a country are simply living beyond our means. 

 

Looting solves nothing.

 

  

Andy Caldwell is the Executive Director of COLAB and a 44 year resident of the Central Coast.  Contact him at andy@colabsbc.org  

Posted at 11:52 AM By admin | Permalink | Email this Post | Comments (0)



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