2010-01-23

Pesky Mountain West Politics vs Massive Debt Ceiling Increases

Greetings, as Barney Frank puts it, "from those smaller states that aggregate to get up to be the 40, out in the mountain West for example." Allow me to start my contributions to this most excellent site by bringing you some smaller mountain West politics.

A fascinating sequence of events happened in the Idaho capital over the last two weeks. It began with Governor Otter announcing the budget plan last Monday. Like most states, Idaho is down on revenues as well, so there were two options: cuts or increase taxes. Thankfully, Gov. Otter chose the former. Many agencies are getting their state funding cut or phased out completely over the next four years. Among those who were hit: education, Idaho Public TV, and the Idaho Human Rights Commission.

The timing of this may have been unavoidable, but cutting out the Human Rights Commission (HRC) a week before Martin Luther King Day gave certain locals much to speak out on. Bottom line, Gov. Otter has been catching heck for it daily from all over the state, but he’s stood by his plan. Of note, he didn’t say the commission needed to go away. He just is cutting tax money from funding it. Now class, is tax money the only place to get funding from? Of course not. Will cutting funding force any agency to become leaner and either function more efficiently or die? Yes.

This is exactly what is already happening. Cutting funds forced this agency to get creative. The Idaho Department of Labor concluded Friday they can essentially annex the HRC, bringing their functions together. As it turns out, there was overlapping areas already, so consolidating the two will actually SAVE MONEY. Balanced budget, more efficient agencies, no increase in taxes. Trifecta anyone?

Compare this to what the Senate is about to do. Instead of making cuts to bring government spending in line with the reality of our current financial situation, we will increase the debt ceiling by $1.9 trillion. In case you were wondering, that permits the national debt to hit $14.3T. This increase is coming on the coat tails of the last increase of $290 billion in December. If you give a mouse a cookie…

Quick history lesson. The national debt at the beginning of Pres Bush’s first term was just shy of $6T. By the end, it was about $10.7T. Over 8 years in office, the debt worsened by a bit less than $5T. Yes it pretty much doubled. Compare that to ONE year of Pres Obama’s administration. $14.3T-$10.7T=$3.6T. So in 1 year, the Obama administration has already increased the debt 72% of what the Bush administration did in 8 years. Pray that trend doesn’t continue.

Readers, if the debt ceiling raises (again) while the economy maintains even any kind of current level, let alone declines further, there will be less revenue to pay more debt. This is a recipe for bankruptcy, where no one gets a cookie.